Investors Overseas Services

INVESTORS OVERSEAS Services (IOS) was the brainchild of Bernie Cornfield, a former social worker turned mutual-fund financier. Cornfield[Page 445] took advantage of a growing mutual fund trend that began in the 1950s and continued well into the 1960s. Investment in mutual funds was booming, but Cornfield realized that commission fees were way too high, around 8 percent, and that mutual fund companies expenses were far too much. Determined to find a way around these costs, Cornfield incorporated his IOS business outside the United States and located it in Geneva, Switzerland, while he incorporated his new company's funds in Canada.

Marketing primarily to expatriate U.S. citizens, U.S. servicemen, and foreign nationals (mostly German), Cornfield quickly built up a staff rumored to consist of over 25,000 employees. Offering ...