platform is a great distribution tool, but sometimes it is difficult for smaller fund firms to afford the 40 bps management fee and the up-front flat fee. Bob Auer
, senior portfolio manager and founder of SBAuer Funds
told the MFWire
that his company took an unconventional route to get its fund on the platform.
Back in January, Auer was unable to distribute his company's fund through OneSource because of the expense. However, things changed last month when prospective clients that had accounts at Schwab and wanted to purchase the Auer Growth Fund
were told they could not do so.
| Bob Auer |
Auer said he was straightforward with the prospective clients, telling that Schwab was not willing to negotiate their fees so the fund would not be available through OneSource. Auer suggested that individuals who wanted the fund on the platform write to Schwab about the issue.
Sure enough, an e-mail campaign to get the SBAuer fund on OneSource was started. Auer said it only took about two weeks after that for Schwab to come calling. The company then made an offer Auer he couldn't refuse.
"We got a great discount," he said. He declined to give an exact number.
The Auer Growth Fund has been available on OneSource since March 10. SBAuer Funds was formed last August when Auer left his longtime post at Morgan Stanley. SBAuer currently has one fund.
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