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Rating:Fido Foolishly Stands Between a Fund Family and Its Shareholders Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, June 03, 2013

Fido Foolishly Stands Between a Fund Family and Its Shareholders

News summary by MFWire's editors

If you miss Motley Fool's [profile] annual mutual fund shareholder party this month, it may not be your fault. It just might be Fidelity's [profile].

The Wall Street Journal reports that Fido nixed the mailing of this invitation to Motley Fool investors to meet with the funds' managers, declaring that it “is not something that we would allow to be passed through” to Fidelity customers, in an email to Motley Fool.

Motley then shared this email to investors via its newsletter.

WSJ reporter Karen Damato reports that Motley Fool's chief investment officer Bill Mann called the denial "nuts."

“You are Fidelity’s customer, not ours,” Mann explained about the issue in a recent Motley Fool Funds newsletter, according to Damato. He added that Fidelity had approved similar postcard invitations in 2011 and 2012.

Damato writes that this denial exemplifies a common-place frustration felt by fund shops that distribute their funds via securities firms. She writes that "when investors buy fund shares through brokerage firms, they are routinely sent legally required fund documents—including prospectuses, annual reports and semiannual reports—by mail or electronically."

Anything beyond that is at the discretion of the securities firm, she writes.

Damato writes that Fidelity spokesman Rob Beauregard says the company is “very supportive” of fund firms seeking to communicate with investors at Fidelity, but has “high standards” they must meet. For example, no mailings that "'potentially create confusion with clients as to who they should be communicating with' about their investment needs."

Beauregard also told Damato that this was the first time a fund firm has raised an issue about Fido's rules.

Read more in the Wall Street Journal

Edited by: Tommy Fernandez

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