Word: front-end
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...Front-End Loaders. The SEC did not by any means condemn all mutual funds, but centered its fire on the "contractual" funds, in which the investor signs up to buy regular monthly shares over a period of years. The commission, or "load," on mutual fund sales is typically 8.5%, plus a "custodian's fee" of 1% to 3%. What irked the SEC study group is that commissions commonly run to 50% during the first year of the so-called "front-end load" plans, in which more than 1,000,000 small investors have contracted to make monthly payments...
...turned an equally cold eye on mutual fund salesmen. The lure of plumper commissions prompts salesmen to tout the plans with front-end loads above all others. An Investors Planning Corp. salesman who sells a 121-year front-end plan at $20 a month, for example, collects $57 in commissions on the first year's payments of $240; if he sells a $1,000 one-payment plan, he gets only $32.50. Most mutual fund salesmen are part-timers who earn less than $1,000 a year, and many of them are ill-trained recruits who give up the game...
...first year of a $100-a-month ten-year contractual plan is docked for about $500, or half the entire ten-year commission, in the first year. If the investor drops out in the first year, he loses most of his $500. The funds claim that this big "front-end load" is an incentive to steady saving, but some funds think that such juicy commissions are completely unjustified. Says John Dalenz, vice president of Calvin Bullock, Ltd.: "Why not give those salesmen a blackjack and let them take your entire wallet...
...full share of improvements. Like the new Lincoln, which came out a week ago, Mercury is priced the same and looks much the same as last year's cars on the outside. The big changes are inside. Among them: new front shock absorbers and springs, an improved automatic (Merc-O-Matic) transmission, an easy-steering front-end suspension with a ball & socket joint replacing the old-fashioned kingpin assembly. But the biggest improvement is the engine. Instead of last year's 125 h.p. V8, the new Mercury has a completely redesigned V8, turning up 161 h.p., that engineers...
...Lincoln continues with twelve cylinders sensible streamlining, and its air of distinction. It has a new front-end with redesigned radiator and head-lamps...