Mutual funds some kind of racket

Who knew? And we're supposed to depend on them for our retirement (as in our 401Ks). See here ("The Mutual Fund Merry-Go-Round").

AS stock prices have gyrated wildly, many investors have behaved in a perverse fashion, selling low after having bought high. [I didn't do that.] Individual investors bear some responsibility for ill-advised responses to the ups and downs in the market, but they are not the only ones to blame. For decades, the mutual fund industry, which manages more than $13 trillion for 90 million Americans, has employed market volatility to produce profits for itself far more reliably than it has produced returns for its investors.

Too often, investors believe that mutual funds provide a safe haven, placing a misguided trust in brokers, advisers and fund managers. In fact, the industry has a history of delivering inferior results to investors, and its regulators do not provide effective oversight. . . .

Why isn’t there more of an outcry? Investors naïvely trust their brokers and advisers. Most understand too little about financial markets to make informed decisions, intervene too frequently in counterproductive ways and gather too little information about portfolio holdings to evaluate results. Investors like to believe they are doing well, even when they are not. . . .

Meanwhile, the mutual fund industry shouts through a megaphone, making campaign contributions to influence politicians and lobbying to avoid regulation. Without any offsetting pressure from the investing public, Wall Street crushes Main Street. . . .

[T]he S.E.C. should hold the mutual fund industry to a “fiduciary standard,” one that puts clients’ interests first. Currently, retail brokers operate under a weaker standard. As it carries out the Dodd-Frank reform act that became law last year, the S.E.C. must insist that brokers act as fiduciaries, not merely as agents who offer “suitable” investments. For all players in the mutual fund industry — brokers, advisers and fund managers — strong fiduciary standards and investor-oriented regulatory oversight would subordinate the pecuniary interests of the fund purveyors to the interests of the individual investors that the industry purports to serve.

For two decades, laissez-faire attitudes toward financial markets allowed the rich and powerful to take advantage of those less well-off. In the mutual fund world, the hands-off approach must be abandoned in favor of aggressive, intelligent regulation.

This is serious business. The financial security of millions of Americans hangs in the balance.

[Emphasis added.] I would have assumed that these people had some kind of fiduciary duty. How dumb am I.