Growing Rich - Arabictrader.com

GROWING RICH WITH GROWTH STOCKS
particular financial risk,” he says. “When my dad died, I got very
little. It was all basically passed on to my stepmother. I had earned
my money by saving and investing over the years. I built up enough
of an estate that I felt, financially at least, that there was very little
risk things would go wrong.”
Once the Yacktman Fund was up and running, the major challenge
was attracting assets. While Selected American had wooed the
brokerage community and tried to reach out to the general public,
Yacktman realized early on there was another source that not only
had plenty of money, but also was loyal and didn’t do a lot of
switching around. “When I was managing Selected American, I put
together a 15-page report for the board of directors outlining what I
saw as a different way to market the fund,” he says. “The Kemper
people wanted to do it with ads. I suggested that we go out and target
independent investment advisers. They resisted this idea. But when I
went out on my own, it was a natural fit.”
A NEW DISTRIBUTION CHANNEL
Then Yacktman learned about Charles Schwab’s OneSource mutual
fund program, which was still in its infancy. Schwab had created a
distribution channel that allowed both financial advisers and individual
investors alike to set up one account in which they could buy or
sell no-load funds from numerous different families, in some cases
without paying any transaction fees. Instead, Schwab charged participating
funds a distribution fee of 25 cents to 35 cents for every
$100 that was brought in. Funds that didn’t want to pay this fee could
still be purchased at Schwab, but shareholders would be charged a
small commission for the trade, to compensate Schwab for its trouble.
Although many fund families were reluctant to sign on at first,
Yacktman saw it as a great opportunity for gaining instant national
distribution. He also knew that instead of keeping accounts with a
dozen or more different fund companies, the independent adviser
community would surely embrace OneSource, since it made monitoring
client portfolios a breeze. OneSource has since become a huge
success, and most of Schwab’s competitors now have similar fund
supermarkets of their own.
“Schwab started the network in June 1992, right before I was up
and running. I wanted to be part of OneSource, but Schwab decided
39