My apologies on this one - I was given advice a few years ago the fund could cater to foreign investors. It appears there are issues with that, although my 3rd party back office team is going to look into the issue to see if there are any long term solutions to allow it. But for now, unless you are a U.S. citizen living abroad OR a foreign national with a U.S. tax ID living in the states you won't be allowed to invest in the fund. That's disappointing since I enjoy my foreign readership and it makes up some 20% of current traffic.
This is a circus. The whole landscape has changed and based on discussions today the decision for the 12b-1 has been made for me. A lot of broker dealers - especially the popular ones - have made wholesale changes on how they approach the business - i.e. a year ago TDAmeritrade, Etrade, and Scottrade were all covered under a blanket agreement and I simply had to pay for transaction costs (i.e. when an investors buys or sells, I pay the commission to these firms). That's completely out the window now - with many of the changes happening in the past 2-3 months.
(1) Fidelity and Schwab we've discussed the issues - see post earlier today.
(2) Scottrade has abandoned their own platform and now uses Schwab - hence rather than being the low cost option it's part of the syndicate. So there is no longer a low fee (for the fund) way to get into Scottrade and it might as well be called Schwab for my purposes.
(3) TDAmeritrade apparently saw the success of Fidelity and Schwab and decided it wants in on the action. A complete change. While the up front fees are not as high as the other two, they now will be taking a portion of the annual expense ratio for themselves which is a brand new thing. (A year ago this was not at all part of the discussion)
(4) Etrade: the only one of these majors who still goes under the old system; i.e. the fund only has to reimburse the brokerage for commission costs.
So out of these "top 5", of which 3 were safe havens even 6-9 months ago, now all that is left is a low cost option (on my end) is Etrade. Considering the heft of TDAmeritrade and Scottrade in terms of pecking order of online brokers - along with Fidelity and Schwab... well as I said above, the 12b-1 issue becomes more clear. The price to pay to be listed anywhere has risen significantly.
Based on the above, I would encourage investors who are on the fence and have not yet switched money to open a direct account with the fund upon launch if possible - unless you are with Etrade or considering them. Although the way things are headed, everyone wants in on the action and I bet Etrade goes the same route as everyone else sooner or later. Ugh.
One other important notice - there is a lag between when the fund is "live" and a review period for each of these brokerages to approve the fund. (or in theory they can reject the fund) But generally it is 4-6 weeks of review. What does this mean? Since many of my investors are going to be coming through broker dealers I can request the fund not go live until some period after SEC approval. (I was under the impression the fund was "on" the moment the SEC approved, but that is not true based on clarification received today) If most of the monies were coming through via direct investments it would not be an issue; but since a lot is coming through brokers it probably will make sense for me to wait about 4 weeks post SEC approval to turn the fund "on". Another ugh.
These are the brokerages people have asked me about - some of them are Canadian which going back to point one is a moot point at this moment, so I am skipping them.
USAA - yes, upon approval
Interactive Brokers - awaiting response
ThinkorSwim - See Ameritrade
Penson Financial - yes, upon approval
OptionsHouse - trades through Penson Financial
Zecco - trades through Penson Financial
OptionsExpress - appears to be similar structure to Etrade for approval
TradeStation - does not actively solicit mutual funds; only 1% of business
TradeKing - trades through Penson Financial
Vanguard - you guessed it; saw the mad money being made at Schwab and Fidelity and wants in on the action - same problems there.
Bank of America - awaiting response
Barclays - foreign so might be a moot point
Multiple Canadian brokers - at this time, a moot point
Commentary on New Website
This was the lion's share of today's discussion due to the complications and scarcity of examples. From 40,000 feet potential exists for commentary but it cannot be on mutual fund website.... instead more of "Mark's site". Disclosures that this is the writer's personal opinion and not that of mutual fund or advisory firm must be everywhere. There are many issues over and above that, but in the grand scheme it can be done but at arm's length from mutual fund.... and very carefully.
One other issue that came up recently and in the discussion. We won't have the technological capability to open a direct account online in the near future but a "to do" list item. Further with new regulations any IRA Rollovers or the like need to have signature guarantees so the online option is moot to some degree for retirement accounts due to the changing rules. But for regular accounts it was a possibility and an option I would have liked to have but not something the 3rd party back office will offer in the near term.
You will be able to download applications, prospectus, rollover forms and the like in pdf files from the fund website (and then mail the documents in) or if you prefer call shareholder services for the old fashioned method to receive the documents (snail mail).