Yesterday the SEC held a roundtable on the role of 12b-1 fees in mutual funds. As expected, the panel reached no consensus, but it did provide insights both into how the fee is being used and how much disagreement their is in the industry about its role.

The panel lasted all day, starting in the morning and running past 5 pm. Those who wish to review the entire panel can watch on the SEC's website (the link will be working later today, according to the site).

Meanwhile, here are some memorable quotes from the first roundtable session, a historical Historical Perspective on the 12b-1 fee.

On the issue of 12b-1 jurisdiction with the NASD:

"We smoked the peace pipe with the NASD and put the issue to rest." - Kathryn Bradley McGrath, partner at Mayer, Brown, Rowe & Maw LLP

On what to do about the 12b-1 in the future: "You have to read my book to see my solutions." - Matthew P. Fink, former president of the ICI

"Just be sure not to make it worse." - Richard W. Grant partner at Morgan, Lewis & Bockius LLP

"We have consistently failed on disclosure issues." - Kathryn Bradley McGrath, partner, Mayer, Brown, Rowe & Maw LLP

From the second session, The Role of 12b-1 Fees in Current Fund Distribution Practices:

"12b-1 fees level the playing field for small fund companies to compete with larger companies." - Mellody Hobson, president, Ariel Capital Management, LLC chairman, Ariel Mutual Funds Board of Trustees.

"We spend in excess of the money we receive from 12b-1 fees, we are not making a profit off this." - Mellody Hobson

"(12b-1 fees) are not a profit making entity." - Robert W. Uek, independent trustee, MFS Funds

"12b-fees add choice for shareholders." - Martin G. Byrne, managing director, Office of General Counsel Merrill Lynch & Co., Inc

"Preserving 12b-1s encourage different types of fee arrangements at the intermediary level." - Thomas M. Selman, EVP, NASD

"All factors leading to the adoption of 12b-1 fees are badly outdated." - Robert Uek

"We can do better in the way of disclosure." - Robert Uek

"We must be reminded that funds are services, not products." - Paul G. Haaga, Jr., Vice Chairman, Capital Research and Management Company

"Choice is the enemy of simplicity." -Paul Haaga.

From the third session, The Costs and Benefits of 12b-1 Fees

"Surveys indicate 80 percent of investors are not aware of the fees they pay." - Brad M. Barber, Professor of Finance,University of California, Davis

"Investors buy performance first and foremost." - John A. Hill, Independent Chairman, Putnam Funds

"I would like to see distribution fees changed at the account level." - Jeffrey C. Keil, Principal, Keil Fiduciary Strategies LLC

"Acceptable distribution expenditures should be defined in some way." - Jeffrey Keil

"Don't lose sight of investors and investor's interests, 12b-1 serves those interests." - Michael J. Sharp, General Counsel, Citi Global Wealth Management

"The fee has become a feature of the fund itself" - Shannon Zimmerman, Investment Analyst, The Motley Fool.

From the fourth session, Looking Ahead: What Are Our Options?

"Clearly investors want advice...28 percent of investors rely solely on recommendations from advisors." - Barbara Roper, director of investor protection, Consumer Federation of America

"Until we improve transparency, we will have to rely heavily on brokers and regulators to improve fee disclosure." - Barbara Roper

"Other marketplace forces are always trying to fix all those places where we have been confused." - Avi Nachmany, Director of Research, E.V.P., Strategic Insight

"I don't think in the beginning the commission envisioned the 12b-1 would be so widely used as a substitute for a front end load." - Richard Phillips, Partner, Kirkpatrick & Lockhart Preston Gates Ellis LLP

"The commission should above all else, reform the role of directors in regards to oversight of the distribution system." - Richard Phillips.

"Even some very very sophisticated fund observers do not understand 12b-1 fees as a substitute for front-end loads, they believe it is a hidden charge.. the industry would be a lot better off with externalization." - Richard Phillips

"What we're really doing is debating C-shares." - Don Phillips, Managing Director, Morningstar, Inc.

"More is less, we've had enough words in prospectuses, we need to tell investors individually what fees they are paying in dollars and cents." - Richard Phillips 

Correction: The previous version of this story incorrectly quoted Paul Haaga. The correct quotes are as follows: "We must be reminded that funds are services, not products," and "Choice is the enemy of simplicity."

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