Are fund industry leaders the new corporate bad guys? Personal finance columnist Chuck Jaffe certainly seems to think so. In his Sunday column, Jaffe argues regulators should not allow fund firms to offer electronic prospectuses in lieu of paper versions unless they "improve the quality" of the documents.

In what a cynic could characterize as a classic case of hope over experience, it Jaffe apparently wants a document that shareholders will actually read.

"Beyond giving investors a cut of the cost reductions, fund firms should not be given all-electronic disclosure permission until they improve the quality of information they distribute," writes Jaffe.

He adds that "Without that improvement -- plus the pass-through of cost savings -- electronic disclosure is a one-sided deal."

Good luck. As Jaffe himself points out, even profile prospectuses never caught on (and we are not aware that anyone ever even missed them).

Interestingly, Jaffe does not believe that the costs savings provided by converting existing required paper documents to required electronic documents would be of enough benefit to shareholders of and in itself.

"So when the honchos heading fund companies start asking for some sort of regulatory relief, investors should be asking: 'What's in it for me?' If there is nothing in it for you, as a shareholder, the next step would be to put something positive in place."

Jaffe ends his column with a wish: "Here's hoping that regulators are smart enough to recognize that."

Industry honchos may want to wish that industry regulators are not reading him.  

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