Fiduciary rule fallout continues, with MFS Investment Management the latest fund family to announce plans to add Class R6 shares to 20 additional mutual funds.
The Boston-based company said the share classes are expected to launch over the next nine months, beginning June 2, 2017, and ending March 2, 2018.
Class R6 shares are not subject to sales charges, Rule 12b-1 fees or sub-accounting fees and would qualify as “clean shares” under current regulatory guidance.
Once completed in March 2018, 79 MFS U.S.-domiciled mutual funds will be available in Class R6 shares, available for inclusion in retirement plans and in certain asset-based advisory fee programs.
“Since their introduction, MFS has seen strong demand from clients for our Class R6 or ‘clean shares,’ initially in the retirement market and later for advisory programs,” Michael Keenan, senior managing director of National Accounts with MFS, said in a statement. “More recently, there has been an increasing interest for clean shares from brokerage platforms as clients formulate potential solutions regarding the Department of Labor’s Fiduciary Standard rule.”
MFS began adding Class R6 (then-called “Class R5”) shares in 2012 and 2013 to its U.S. open-end retail mutual fund line-up. By March 2, 2018, a majority of its U.S. fund lineup will offer Class R6 shares.
“Class R6 shares offer plan advisors and plan sponsors greater flexibility when constructing defined contribution plans and investment menu options for participants,” Ryan Mullen, senior managing director for Defined Contribution and RIA sales at MFS, added. “In addition, as more advisors turn toward fee-based models, Class R6 shares may be an appropriate option for asset-based advisory platforms as well.”
MFS began making Class R6 shares available to asset-based advisory fee platforms in December 2016.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
