Fund companies have long operated on the assumption that "if customers don't ask for something, they don't care about it."

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WASHINGTON — The Investment Company Institute put the focus of its annual conference here on shareholders. But in making a vocal effort to “put shareholders first,” there was an underlying message that you should take personally.

It goes like this:
“You don’t care. Yes, you are deeply concerned with your fund’s ability to deliver a profit. But that’s about it.

“Important new disclosures? You’re not reading them.

“Additional information in the prospectus? Heck, you’re not looking at most of the important data that already were in there.”

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The sad thing is that fund management is right. Investors don’t root around in the data that are available to them.

James Riepe, the chairman of the Investment Company Institute, the trade group for fund companies, noted that one disclosure about to be put into place involves the board of directors providing a reason for why it had extended the contract of the fund-management firm.

Though he noted that the board’s reasoning is interesting, he doubted anyone would look for it in a prospectus that’s about 50 pages long.

That’s why fund firms hope to use your inactivity against you, to get some relief from what Riepe described as a “disclosure explosion.”

Fund companies have long operated on the assumption that “if customers don’t ask for something, they don’t care about it.”

They have used that thinking to keep all kinds of useful information out of your hands.

It’s not just disclosures. Often it has to do with your personal accounting. Many fund firms do not provide cost-basis accounting for shareholders, which is critical for determining the taxes you owe when you sell shares. And most firms do not provide your “dollar-weighted returns,” which show the performance of your account based on the timing of purchases and redemptions.

Having come through the worst scandals in industry history, fund firms face all kinds of new disclosures and they are trying to gauge readership numbers. Their point is if consumers don’t use the disclosures, maybe they should lose them or at least have the data relegated to firms’ Web sites.

Truth be told, fund firms have a point. As a shareholder, I do not want to pay for massive reports going unread.

But as an investor, I want access to huge amounts of data, even stuff I may not want to read every time, so that fund researchers and analysts can do some of the dirty work of crunching that information and making it digestible.

As the legislative and regulatory pendulum swings back after the post-scandal changes to whatever “normal” will look like, there is little doubt fund companies will win some of the battles to curtail disclosure.

The key for shareholders is to care about the information available now because it may not be in an easy-access, sent-in-the-mail-every-quarter form for long, and because once the information is harder to find, a lot of investors will go back to living without it.

The more you know about a fund, the easier it is to stick with it when times get tough. So though you may not want to read all of the disclosures regularly, you need to care about them enough to know which ones matter most to helping you be a savvy fund investor.

Chuck Jaffe is senior columnist at CBS Marketwatch. He can be reached at jaffe@marketwatch.com or Box 70, Cohasset, MA 02025-0070.