Fund companies do not have a friend in Congressman Michael Oxley (R, Ohio). The chairman of the House Committee on Financial Services railed against abusive fund and insurance sales practices in a Thursday hearing of the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, titled "G.I. Finances: Protecting Those Who Protect Us."

At issue are advisors' on-base sales of contractual funds to military personnel. Oxley stated in opening remarks that he was suspicious that the products have "virtually disappeared" from the civilian market, and that the contractual funds sales have first year commissions as high as 50 percent.

"Some of the biggest names in the mutual fund business are sponsors of these contractual plans sold primarily to military personnel," continued Oxley.

"But Republicans and Democrats in Congress can no longer pretend this is about a few bad apples. This is a systemic problem that needs to be fixed. I understand that NASD has been conducting a thorough investigation of contractual plans for more than a year and will have an announcement in the near future…I look forward today to a thorough analysis of the problem and potential solutions for Congress to act on this year," stated Oxley.

Elizabeth Jetton, president of the Financial Planning Association; Mercer Bullard, founder of Fund Democracy and several insurance executives also spoke during the hearing.

Bullard took aim at the advisors themselves, calling on brokers and advisors to be held to the same fiduciary standard. 

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