Years ago, Putnam Funds had a terrible reputation when it came to fees and a duty of care to its investors when it was implicated in a late trading scandal. There was a Boilermakers Union Local that made over $4 million in profit for their pension plan through market timed trades.
Putnam lost many institutional clients as a result and implemented many changes to ensure that this issue would not happen again.
Boy, have times changed. Putnam, one of the leaders in the 401(k) business has announced that they will provide fee disclosure to participants in their administered plans before they will be required to by the regulations promulgated by the Department of Labor.
Putnam is proof that companies can change and old dogs can learn new tricks. They have embraced full fee disclosure to survive and so many third party administration firms that will not embrace fee disclosure will die.
Change is a hard concept, but if you don’t change with the times, the times will change you and rarely will that be a good thing.
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