MFS Announces Open Architecture, Commission Changes

The Boston-based firm also announced in a news release equalized commissions and single source commissions on actively managed funds.

Effective October 1, clients can construct an MFS retirement plan by selecting from an expanded menu of mutual funds from more than 20 fund families, including American Funds, Franklin Templeton Investments, Lord Abbett, Oppenheimer Funds and T. Rowe Price.

“Our goal is to meet the overwhelming demand for open architecture, while focusing on our clients’ fiduciary responsibility to ensure that participants are making prudent investment decisions,” said Martin Beaulieu, MFS’ Director of Global Distribution and President of MFS Retirement Services.

Under the new commission structure, the company said in the announcement, whether advisers sell MFS or non-MFS funds, they will earn the same commission, with all payments coming from MFS.  “Our program to equalize all fund commissions ensures that the interests of participants come first,” Beaulieu said. “We believe this practice is an important development for MFS and the mutual fund industry.”

The announcement said that additional enhancements to MFS’ retirement plans slated for an October 1 unveiling include:

• New investment menus – Advisors choose the investment menu that is appropriate for the plan, depending on the investment selection and dealer compensation schedule. There are no required asset minimums.
• Reduced and simplified administrative pricing – MFS is reducing its administrative fees for plans investing in the retirement share class suite and simplifying the pricing schedule. Pricing is now based on total plan assets and the number of plan participants. In addition, MFS will waive the plan installation fee for plans established at MFS for the remainder of 2005.