Mutual Funds

Management Practice (MPI) has been an active adviser to mutual fund directors and their counsel since 1970. MPI provides independent information to help fund trustees carry out their responsibilities. Originally, MPI's work focused on the contract renewal process, but it now also includes consultation concerning the dynamics of the board itself, fee negotiation, and trustee compensation and benefits. In each of the areas outlined below, we have worked closely with advisers, counsel, and independent directors. MPI does not either directly or by implication provide legal advice.

MPI operates a dedicated mutual fund governance website:

www.mfgovern.com

  • Compensation Review for Independent Directors - For 15 years MPI has provided compensation consulting using industry peer group comparisons, as well as providing more in-depth analyses that assess the effort, expertise and exposure of each director in order to properly set pay levels.

  • New Trustee Selection and Criteria - Including identification of future governance needs, current gaps, retirement cycles and needs assessment.

  • Contract Renewal/15(c) - MPI assists fund boards with the process of analyzing, negotiating and renewing the advisory and other related contracts.

  • Special Topics - MPI has expertise and can assist boards in various areas such as analysis of fees and fund expenses, proxy voting, soft dollars, and trading practices.

  • Director Workshops - MPI facilitates workshops across the country that focus on particular topics such as compensation or the role of the Independent Chairman.

  • Trustee Education Publishing - MPI has published several books, including The Uneasy Chaperone: A Resource for Independent Directors of Mutual Funds and the Uneasy Chaperone: The Critical Role Of Independent Directors of Mutual Funds. Our next book is due in spring of 2008. MPI has also written several short plays to illustrate specific governance practices. Download our brochure for more information on how to order, or simply send us an inquiry bellow.

  • Special Evaluations of Fund Fee Schedules in the Context of Fee Litigation - These reviews include comparisons of fund fee structures and expenses with similar funds, analysis of changes and trends in fee structures, analysis of relationship profitability for the adviser, and modeling of possible variations to the existing starting fee and scale down formula.

  • Special Evaluation of Costs Related to Proposed or Existing 12b-1 Plans - Including tracking of appropriate distribution expenses.

  • Evaluation of Proposed Changes in Management Fees or Other Elements of Fund Expense - Including complex-wide expenses such as administration, fund accounting, transfer agency and custody.

  • Possible Change of Adviser or Sub-adviser - Including selection criteria and priorities.

  • Expert Witness on Behalf of the Independent Trustees of Mutual Funds - MPI has served as expert witness for independent directors in a variety of cases.
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    Comparing 'Degree of Difficulty'
    In addition to the myriad duties mutual fund directors must carry out with regard to the funds they oversee, they are faced with the added burden of setting their own pay.  The demands of the job, including the expertise required and time involved, justify being paid fairly.  However the optics of being overpaid would not be perceived favorably by fund shareholders or the financial press.
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    2008 Director Compensation Survey
    Management Practice Inc. (MPI) has just completed its sixteenth annual "Survey of Mutual Fund Director/Trustee Compensation and Governance Practices", with data covering 2,140 directors from 411 fund families. Copies of, and specific comparisons to, the survey detail are available from MPI.
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    Improving Fund Stewardship Grades
    Morningstar assesses the governance and ethics of mutual funds by assigning a Stewardship Grade.  The aim of the grades is to "shine a light on better/best practices", but ratings can be subjective.  We examine several ways funds can improve their grade.
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    2009 Workshop Program

    Mutual Fund Directors Forum and Management Practice are please to announce Fund Directors’ Responsibilities for Measuring Best Execution and Monitoring Soft Dollar.

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    Evaluating Board and Trustee Performance
    Guidance to trustees about how to comply with the SEC's new requirement that Mutual Fund directors annually evaluate the board's performance. This SEC requirement follows an earlier ICI recommended “best practice”.
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