The Supreme Court of the United States will hear arguments in a case involving whether a mutual funds fees are too high?

The case is Jones v. Harris Associates. Here’s the synopsis from the Court:

A group of individual investors sued Harris Associates, which advises on Oakmark funds. The investors, who own shares in several Oakmark funds, allege that Harris’ fees are so high they violate the federal Investment Company Act of 1940, which was created to limit excessive investment adviser fees.

This is nuts. There shouldn’t be a law to “limit excessive investment adviser fees.”

Let me explain how this works:

If you think a mutual fund’s fees are too high you should not buy from that fund. If all mutual funds charge too much then you start your own and charge lower fees, taking advantage of the gap in the market place. The market place works to regulate fees and prices in any market.