@msf, sorry, I'm not sure how I got stuck on the R1 shares but that negates much of what I was saying. Sorry for wasting your time and everyone else's.
I completely agree that certain expenses exist regardless of how they're packaged. Nonetheless I think many people are mislead by both lack of transparency on the part of fund companies, even though it has certainly gotten better over time, but also by companies like M* who provide historical returns and category rankings without regard for whether a fund carries a load or not and without disclosing that fact. For instance, AF New World A is ranked in the 18th percentile for its 10 year record but if you account for the load then it drops to the 30th percentile. I'm not saying 30th percentile is bad at all, just that they're leaving out an important fact. It's not an easy fact to deal with but it could at least be disclosed so people know the numbers they see don't tell the whole story.

FYI: (This is a follow-up article)
Without much fanfare, there’s been a trillion-dollar upheaval in a favored corner of America’s financial system: the money-market funds where institutional and retail investors park cash to earn returns better than bank deposits offer. The turmoil has been driven by new rules that go into effect this week. They’re meant to prevent a repeat of the crisis in September 2008, when investors found that funds they thought were as safe as banks were anything but.
Regards,
Ted
http://www.bloomberg.com/news/articles/2016-10-12/new-rules-transform-2-7-trillion-of-money-funds-quicktake-q-a

A couple great threads on the new DOL rules. (I'm still struggling to fully digest the longer one. :))
As a practical matter, I wonder (but don't know) how many regular readers here will be impacted by the changes. Suspect most who come here tend to be older self-directed investors relying largely on no-load ETFs or mutual funds. Many, it seems, do use broker-sponsored online portfolio design services (probably the wrong term). But I'd guess fewer than 10% are paying a human for advice at this point in their investing life.
There are some here who are financial advisors or pseudo-advisors. For them the ramifications are very real. I commiserate with anyone forced to deal with higher paperwork loads, face increased litigation, or jump through unnecessary hoops.

Merrill Edge isn't affected - no advice provided.
From a column I linked to in another thread:
"Merrill plans to encourage its retirement clients to consult with their advisor about whether to move their brokerage IRA accounts to Merrill Lynch One [wrap account] ... adding that another alternative for investors is the brokerage’s self-directed and guided investing channels offered via Merrill Edge."
http://www.thinkadvisor.com/2016/10/07/dol-fiduciary-rule-forces-merrill-to-drop-commissi

Glad you mentioned annuities (seriously). I'd run across comments by Milevsky and was debating whether to post a link. He's someone who has studied the annuity market extensively, and IMHO does objective analyses. He seems to be generally well respected in the field, e.g. here's a cite by Kitces.
http://www.thinkadvisor.com/2016/09/08/milevsky-on-dol-fiduciary-rule-big-flaws-annuities?slreturn=1476284738&page_all=1
Milevsky's thesis is that the DOL rules are unduly harmful to annuities in that they focus too heavily on fees That annuities are complex products that require effort to explain (or sell, for the cynics out there :-)), so compensation needs to be higher than for selling an index fund. But what's reasonable compensation, especially for this type of product? I know BobC appreciates that question.
The takeaway from this is that the DOL rules need adjusting for annuities. Whether the proposed legislation is a good adjustment, I don't know, I haven't looked at it.
A safe harbor is a simple rule to follow, in contrast to an ambiguous regulation with little guidance and potential for lawsuits. If that safe harbor offers investors reasonable protection, that seems like a good thing. If it is too rigid (and removes good products from market), or if it eviscerates legal protections, then it is a bad thing.
The devil is in the details. The mere fact that a problem is being addressed is not proof that the system is rigged. (I'm sorry, too much 24 hour news exposure.)

As with most load funds, it looks like the no load R1 version charges higher expenses, mostly in the form of a giant 12b-1 fee, so long-term investors are still better off paying the load if they plan to stick around for a long time.

Part of that is correct, but you're looking at the wrong share class - it's F1, not R1.
All funds have costs associated with maintaining accounts, such as producing annual statements for existing investors, answering their questions, etc. Ultimately it is the investor who pays these costs, but the mechanics can vary from fund to fund.
For example, American Century funds have a single "all in" fee. You pay the management company a flat fee, and they cover all the expenses. For Ultra Investor class shares TWCUX , that's 0.98%. Some of that is going to pay the actual managers, but a fair chunk is going to pay for servicing the accounts (or to pay the NTF platforms to service the accounts for them). Since servicing institutional accounts is cheaper (less to do per dollar in the account), the institutional shares TWUIX charge an "all in" fee of just 0.78%.
There's no 12b-1 fee there, there aren't even "other" fees. But you're still paying a percentage for the servicing and for the NTF platform.
Most funds don't use an "all in" fee schedule. They may bury the servicing costs in "other expenses". Or they may list a separate line item for servicing fees. Usually that shows up as a 12b-1 line item. Whether the cost is called out or not, it's there, and you're paying it.
What matters is not whether there are separate line items, but how much your total expenses are. TWCUX (0.98% ER) is not a better deal than TIIRX (0.73% ER) simply because it has no "other" expenses. TWCUX has just internalized those expensees and you're still paying for them. TWCUX is not a better deal than TIIRX because it doesn't have a separate 12b-1 fee. It has just internalized the servicing costs and you're still paying for them.
TIIRX is the better deal because it costs less "all in".
Where you are right is that 12b-1 fees above 0.25% must be used for marketing and sales, not for running the fund, for maintaining existing accounts. That's money that isn't being used to help you, the investor. And that's why funds with 12b-1 fees above 0.25% cannot be called noload funds.
R1 funds, with 1.00% 12b-1 fees are not no load funds. And they're not the share class discussed in the M* article.

But what does that mean? The load drops to the bottom line of the investment advisor or they get used for other expenses that are normally collected through 12b-1 fees, right? And 12b-1 fees are supposed to be used for sales and marketing, no?

No. As explained above, a fund can market itself as a noload fund only if its 12b-1 fee does not exceed 0.25% and only if that fee is used for servicing accounts, not for sales and marketing. So the F-1 shares (0.25% 12b-1 fee) use the fee for servicing the accounts (i.e. they pay Fidelity and Schwab to service the accounts).
https://www.sec.gov/answers/mffees.htm

As usual for M*, not only don't they mention the giant 12b-1 fees for the R1 class, they actually go so far as to talk about how American Funds' fees are low in almost all cases- for the load bearing shares of course and without considering the load I believe.

They don't talk about the R1 class because they're writing about the F1 share class that retail investors can purchase noload without using an advisor. Matching fund against fund, AF vs. most other fund families, you'll find that AF funds, all in, are cheaper. Their A shares are cheaper than other load families' A shares, and their F-1 shares are cheaper than most families' noload shares, whether the family is a load family or a noload family.

Well, that is strange. First, paying a 12b1 with no advisor. Second, why would anybody pay loads anymore? I would think that EJ FAs would be miffed at this development.

No - if there were a wrap fee then this would represent no change, i.e. you would still be required to buy the fund though an advisor and pay the advisor a fee. That was the status quo.
For example, here's the entry an F-1 fund at Scottrade:
https://research.scottrade.com/qnr/Public/MutualFunds/Summary?symbol=316326
At the top of the page it says:
(!) ABHFX is an Advisor Class fund, which is available to investors who are working with a Scottrade® Advisor Services Registered Investment Advisor.
There's where the wrap fee (or flat fee, or whatever) comes from. Not from the brokerage itself. The big news is that you don't have to work with an advisor to buy the same shares at Schwab or at Fidelity.

Do the F-1 offers at Fidelity or Schwab require a wrap fee?

As with most load funds, it looks like the no load R1 version charges higher expenses, mostly in the form of a giant 12b-1 fee, so long-term investors are still better off paying the load if they plan to stick around for a long time.
But what does that mean? The load drops to the bottom line of the investment advisor or they get used for other expenses that are normally collected through 12b-1 fees, right? And 12b-1 fees are supposed to be used for sales and marketing, no? I guess, but its just a guess, that the fund company is better off in the long run with 12b-1 fees that "never" end as long as their results are good enough to avoid big redemptions. Maybe this is a play for market share with all the investors who simply won't pay a load as a matter of principle rather than any economic evaluation of the options.
As usual for M*, not only don't they mention the giant 12b-1 fees for the R1 class, they actually go so far as to talk about how American Funds' fees are low in almost all cases- for the load bearing shares of course and without considering the load I believe.

Hi @Charles,
Let's look at the other side of the coin (so-to-speak).
I am an AF shareholder that paid the "one time sales load" many years back before there were a good selection of no load funds. As I understand these no load (F1) shares are for wrap accounts where an ongoing account wrap fee is charged rather than a one time upfront sales load. In talking with my broker I was told I will be good to go (as in the past) with my self directed ira account which would be grandfarthered with no wrap fee charged. Now, I am thinking that is indeed a good deal. Although, I can not put new money into this account after April 2017 (retired now so that is not important to me) I will be allowed to do nav exchanges within fund families owned in this account. And, to, of course, sell fund shares and to take distributions as I have done in the past. Since, all of my funds within this account are set for their distributions to pay to cash, at this time, sales are not necessary. It is uncertain at this time if I can buy new shares with my fund distributions unless I set the account up before April 2017 for reinvestment of fund distributions. Since, I am retired I most likely will leave the funds distributions set to pay to cash. While, my son, who is still working, will leave his account set for reinvestment of fund distributions.
Also know, some American Funds A shares can be bought back of the 5.75% sales charge you reference.
I'm thinking I've got a good deal ... no ongoing wrap fee for me. From my perspective I've got the better deal over what new investors will be getting today who invest in F1 shares and have to pay ongoing wrap fees.
Skeet

FYI: (This is a follow-up article)
Every financial advisor in the country has been debating the Department of Labor's new fiduciary rule, arguing about whether or not it's really good for investors. For my part, I’m on the record here and here saying that the rule -- which requires brokers who work with retirement accounts to put their clients’ financial interests ahead of their own -- is a boon for investors.
Regards,
Ted
https://www.bloomberg.com/gadfly/articles/2016-10-11/thank-you-merrill-lynch

FYI: For international funds to race ahead of domestic funds, you typically need a falling dollar and rising foreign markets.
This year, most international funds are misfiring on at least one cylinder. The average large-company foreign blend fund has gained just 2.38% this year, versus 5.87% for its domestic counterpart. You can blame either a strong dollar or weak foreign markets for the poor performance.
Regards,
Ted
http://www.investmentnews.com/article/20161011/FREE/161019984?template=printart

Securities lending is indeed a part of the structure of most ETFs. While Vanguard returns all of the proceeds above its internal costs for this lending to ETF shareholders, so does Schwab, although in Schwab's case it uses an outside unaffiliated vendor to do the lending, which takes a cut of the lending proceeds. Schwab keeps none of these proceeds for itself. BlackRock is a different story, keeping a portion of the lending proceeds for itself, although the amount is small enough that 22% of Schwab's equity ETFs beat their benchmarks instead of merely tracking them. The financial risks of this lending is another story entirely and as your Forbes' article points out, Kevin, different fund companies have different policies on what they will lend.
Regarding the analysis in Deep Capture, I should add that its original author, Patrick Byrne is the CEO of Overstock.com, and a controversial figure himself:
garyweiss.blogspot.com/2016/05/overstockcom-ceo-patrick-byrne-loses.html

Keep Your Bonds, but Reduce the Risks JOURNAL REPORTS: FUNDS & ETFS
Some advisers are wary of using bonds in client portfolios. Here is why you still should own them and how to do it right.
As strong demand has pushed up bond valuations—depressing their already low yields—some investors and financial advisers are saying “enough” and are turning their backs on the sector.
Not so fast, say many bond professionals.
1. When bonds make sense...not just worry about yield. “If you own bonds for diversification, income isn’t something that you should [focus] on,” says Laura Thurow, head of asset manager research at Robert W. Baird & Co.
2. Know where risks may lie....In relation to Treasurys, junk-bond yields are roughly in line with historic averages, so they’re not in bubble territory, says Rob Balkema, who manages multiasset funds at Russell Investments.
3. Spread risk in a portfolio.. it is possible to balance them, says Kathleen Gaffney, who manages Eaton Vance Multisector Income Fund (EVBAX). She suggests dividing your bond portfolio into roughly equal parts, each dedicated to a particular type of risk
4. Diversify your sources ... Aviance Capital Management, in Sarasota, Fla., portfolio manager Jeff Walker likes preferred shares.... Convertibles also gyrate less than stocks, though they do move in sympathy with them, says Katrina Lamb, head of investment strategy at wealth-management firm MV Financial, Bethesda. Md.
5. Bonds at lower valuations
Investors who want to temper the risk of principal loss could put some money into bonds that aren’t trading at high valuations. One with potential for appreciation is the U.S. Treasury inflation-protected securities, or TIPS, sector, says Mr. Worah of Pimco.'
....core U.S. consumer-price inflation already has risen above 2%, and Pimco believes it is likely to stay there for a while.
“The factors that have been keeping inflation down, the commodity price correction and strength in the dollar, have faded,” Mr. Worah says. “TIPS are the cheapest government bond” and are worth owning by themselves, he adds.
http://www.wsj.com/articles/keep-your-bonds-but-reduce-the-risks-1476064923
Goldman Asset Likes Inflation Bonds Amid Best Rally Since 2012
Wes Goodman, Bloomberg
“We like them a lot,” Mike Swell, the co-head of global portfolio management for fixed income in New York, said in an interview on Bloomberg Television Tuesday. “Investors are catching up to what a lot of us in markets already know, that inflation is picking up.”
TIPS have returned 6.9 percent in 2016, heading for their biggest gain since 2012, according to Bank of America Corp. indexes. Nominal Treasuries have returned 4.3 percent this year.
http://www.bloomberg.com/news/articles/2016-10-12/goldman-asset-likes-inflation-bonds-amid-best-rally-since-2012
Goldman Sachs Infl Protected Secs R6 GSRUX
iShares Barclays TIPS Bond Fund (Etf) TIP
https://www.google.com/finance?q=NYSEARCA:TIP&ei=GLL9V6GcAYepmAHR_qf4Cg

@bee, Nothing to disagree with Dr. Byrne's points. Wall Street has always had political allies who were purchased with contributions. And too many of the folks on Bloomberg and CNBC are good looking teleprompter readers and at most journalists, and definitely not economists or financial experts.
And from the WSJ: "The ETF With the 0.00% Fee”
Use the top article on this SEARCH.
Kevin

FYI: U.S. stocks tumbled on Tuesday, with the S&P 500 and the Nasdaq on track for their worst day in one month, after Alcoa kicked off the earnings season on a dour note.
Regards,
Ted
Bloomberg:
http://www.bloomberg.com/news/articles/2016-10-10/oil-gains-burnish-asian-stock-prospects-while-yen-nurses-decline
Reuters:
http://www.reuters.com/article/us-usa-stocks-idUSKCN12B1CH
MarketWatch:
http://www.marketwatch.com/story/losses-on-tap-for-wall-street-stocks-as-oil-backs-away-from-highs-2016-10-11/print
USA Today:
http://www.usatoday.com/story/money/markets/2016/10/11/stocks-dow-tuesday/91888852/
IBD:
http://www.investors.com/market-trend/stock-market-today/stocks-down-nasdaq-gets-near-50-day-line-medicals-smacked-apple-still-firm/
WSJ Markets At A Glance:
http://markets.wsj.com/us
Sector Tracker:
http://www.sectorspdr.com/sectorspdr/tools/sector-tracker
Current Futures: Negative
http://finviz.com/futures.ashx

I did go back to read my original comments. You are right, I did say the rules do not apply to IRAs, and that was incorrect. Should have just said personal/trust accounts. Thanks for pointing out my error. I do not disagree with your general comments. But the BICE is not just "a set of exemptions to the fiduciary standard". If that were the case, fiduciary, fee-only advisors would not need to use it, since they have already established and stated their adherence to fiduciary standards in their registration documents. Nevertheless our compliance consultant attorneys suggest EVERY 401k rollover we do for clients should have one of these on file. The thought is that every advisor-assisted 401k rollover could be viewed as suspect, regardless of the process. Sort of having to prove you are not guilty. However, if this is what it takes to reduce the inappropriate annuity and other deceptive sales practices, we are ok with it. I agree with you on that.
The length has a lot to do with the nature of the beast. A bunch of government attorneys, agency bureaucrats and administrators (a combination of which is scary enough), beset by special interest groups, politicians, and other agencies. No wonder the document is absurdly long and often open-ended. Yes, having a fiduciary rule is better than none at all. Unfortunately politics prevents an all-encompassing fiduciary rule that is simple, straightforward, and applicable to ALL transactions and advice.
Thanks for your input.

BobC, you wrote that the DOL rules do not apply to ordinary IRAs.
"DOL rule & regs. Remember they apply to 401k rollovers, not regular IRAs and personal accounts. "
That was just plain wrong. BICE may not apply to some vanilla IRAs, but that's not what the regs are about. The regs are about holding advisors of ERISA and IRA accounts to a fiduciary standard.
In fact, BICE is, as the 'E' states, a set of exemptions to the fiduciary standard. So if BICE doesn't apply to vanilla IRAs, that means that those IRAs are held to an even higher standard, i.e. one without exemptions.
"A number of attorneys will tell you that moving 401ks to level-fee accounts does not remove the BICE form ..."
Even ML agrees with that. BICE is required for moving 401ks, but only for moving the accounts and not not for maintaining the level-fee accounts once established. From the ThinkAdvisor article I cited:

Merrill says that it will not use the Best Interest Contract exemption “to service or support ongoing IRA brokerage account activity.” However, “when appropriate, we will use this exemption to recommend enrollments in our Investment Advisory Program from a retirement client’s IRA brokerage accounts, or rollovers from ERISA 401(k) plans.”

The original DOL proposal would have done away with commission-based accounts. If the big boys want everyone in wrap accounts anyway, and the big boys wrote all the rules, how did we get a final version that restored commissions?

When the DOL initially floated this proposal in 2010, it stated that fiduciaries could not be paid on commission. Since then, however, it has bowed to pressure and admitted commission-based schemes as long as the broker signs an agreement stating that the advice is given in the customer’s best interest.

http://ibd.morningstar.com/article/article.asp?id=718083&CN=brf295,http://ibd.morningstar.com/archive/archive.asp?inputs=days=14;frmtId=12, brf295
As far as level of detail goes, on the one hand, the regulations are not short; on the other they don't spell everything out to the penny (e.g. what constitutes reasonable compensation). Should the regs be even longer and more detailed, or shorter and potentially subject to more litigation?
I'll stick with Voltaire on this one - the perfect is the enemy of the good. Things will sort themselves out over time. Having a fiduciary rule is better than not having one.
http://www.goodreads.com/quotes/215866-le-mieux-est-l-ennemi-du-bien-the-perfect-is-the