October 24, 1991
TO: BOARD OF GOVERNORS NO. 81-91
RE: REMARKS OF JACK BOGLE AT NASAA CONFERENCE
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Attached for your information is a copy of remarks given by
Vanguard Chairman John Bogle before this year's conference of the
North American Securities Administrators Association. In his
remarks, Mr. Bogle raised concerns that the mutual fund industry
may have lost its traditional bearings in a chase for more
assets. In particular, he criticized increases in fund expense
ratios and advisory fees, the effects of Rule 12b-1 plans, and
disclosure by funds in advertising and reports to shareholders.
Among his recommendations were increased coverage by the media of
advisory fee increases, adoption by the SEC of the proposed
"management's discussion and analysis" for mutual funds, and the
adoption of a fiduciary standard under federal law for fund
directors. He also stated that the elimination of state expense
limitations has played a major role in the rise of fund expense
ratios.
Lawrence A. Rogers
General Counsel
Attachment