Mutual funds are making money for investors again. They never stopped making money for others.

Stock pickers, accountants, distributors, transfer agents, brokers, advertisers, attorneys, custodians and others suck steadily at the $7 trillion inside mutual funds.

The drain continues through good markets and bad.

Investors’ accounts drip fees through so many cracks that the typical fund owner probably doesn’t realize how much he or she pays, who gets the money and how it affects returns.

That may change.

As the mutual fund industry comes under wider scrutiny, fees and how they’re reported to customers have taken center stage.

New York Attorney General Eliot Spitzer has called fund fees “exorbitant” and forced one fund family to cut its fees 20 percent.

Brokers have been caught withholding discounts on sales charges that some investors should have received when buying mutual funds. Fund companies face questions about collecting marketing fees on mutual funds that no longer seek new customers.

One recent challenge claims that fund companies hide steep trading expenses from their customers.

“For every dollar you know you spend on fund expenses, another 40 cents is hidden from view,” said Mercer Bullard, a University of Mississippi assistant professor who acts as an investor advocate at www.funddemocracy.com.

Another complaint focuses on fund companies’ use of brokerage commissions to buy research materials instead of stock trades, a practice that is legal. Yet a couple of fund companies recently abandoned this arrangement, called soft dollars.

Other questions deal with fund companies’ “revenue-sharing” agreements, which may entice brokers to favor one company’s funds over another when advising clients.

Don’t expect the debate about fund fees to clarify matters. Even basic facts, including whether fund fees have climbed steadily or fallen noticeably, remain in dispute.

Ultimately, investors should get clearer and fuller disclosure of what it costs to own a mutual fund. It will be valuable information – information that investors can use to track and limit their costs and improve investment returns.

Investors can thank Spitzer for sparking the fund fee debate.

He’s had the industry’s attention since last September when he leveled charges of illegal and improper trading in fund shares by big investors and fund insiders.

Spitzer has now turned his attention to fund fees. He blamed unreasonably high fund fees on the same faulty governance of mutual funds that had led to the illegal and improper trading.

In December, Spitzer broke ranks with federal securities regulators by demanding that Alliance Capital Management cut fees by 20 percent as part of a settlement of improper trading charges. The Securities and Exchange Commission refused to link fee levels and illegal trading in its settlement with Alliance.

In late January, however, another target of the fund trading scandal, Putnam Investments, voluntarily put limits on fund fees and announced new disclosures in an effort to win back investors’ trust.

Investors who think they know what their funds cost them should think again. The numbers reported by the fund industry and its watchdogs are all over the place.

Data from Morningstar Inc. show that funds’ expense ratios, which are reported to investors when they invest and are updated annually, are sharply higher than they were in 1980.

The average expense ratio for U.S. stock funds has climbed to 1.52 percent of fund assets from 1.07 percent in 1980, Morningstar reports.

But data from the fund industry’s chief information source, the Investment Company Institute, show investor costs fell 43 percent between 1980 and 2001.

The main difference: The industry group’s numbers include sales charges paid to brokers or advisers, and these have fallen. Before the advent of no-load funds, investors routinely paid 8 percent of their money in sales loads. These sales loads now are closer to 4 percent or 5 percent.

Funds also have developed new classes of shares that spread sales costs over several years or charge them when an investor sells shares rather than when they are purchased.

For example, the industry created B shares, whereby investors are charged sales loads when shares are sold. These have come under scrutiny by regulators and critics who question whether B shares are better for the broker than the customer.

Some of the costs previously covered by upfront sales loads now get paid out of an annual fee called a 12(b)1 fee, which is included in the numbers from Morningstar and the Investment Company Institute.

Standard & Poor’s Corp. has questioned why more than 100 funds still charge shareholders these marketing and distribution fees on closed funds, so named because they no longer seek new investors. Funds close typically to avoid growing too rapidly or becoming too large, both of which can interfere with the fund manager’s ability to invest well.

But 12(b)1 fees don’t just buy ads in magazines to attract investors to the fund company. The money typically goes to the broker who advised the customer to buy the fund, essentially to pay for continuing advice and services from the broker.

Other questions focus on payments that fund companies make to brokers beyond sales commissions and 12(b)1 fees through revenue-sharing agreements. The concern is whether these payments influence which funds the broker recommends.

Spitzer’s chief complaint is that money managers charge mutual funds higher investment advisory fees than they charge pensions and other institutional investors for the same services, namely managing their money.

The Investment Company Institute has called Spitzer’s general comparisons of fund and pension fees invalid. In a lengthy report, it argued that the management fees that funds pay to fund companies cover administrative and business costs not covered by the advisory fees that pensions pay.

The organization also said funds are more costly than pensions to operate. Fund companies, for example, employ thousands to answer investor phone calls and send out lengthy prospectuses and annual reports to investors. Pensions don’t.

It also said that when fund companies hire outside money managers for their funds, they pay about the same rates as pensions.

Neither Morningstar nor the Investment Company Institute numbers include all the costs that fund investors pay.

They specifically exclude commissions the funds pay to brokers to make the stock trades. The commission dollars come right out of the fund, but are not included in the expense ratio that is disclosed to investors.

Commissions are among the “hidden costs” cited in a January report by the Zero Alpha Group.

Zero Alpha’s report said brokerage commissions and other trading costs of large, actively managed stock funds boosted expenses by 43 percent from the funds’ expense ratios.

The other trading costs include the spread between the buy price and sell price when stocks trade. The buyer pays a higher price than the seller receives in a transaction. While these spreads are narrow, they mean a fund loses money simply buying and selling shares of stock.

Another trading cost, called market impact, comes about because a fund can push down stock prices just by selling its holdings, which often are substantial, or push them higher as it accumulates a lot of shares.

“What most investors don’t understand is that these are additional costs,” said Edward O’Neal, a Wake Forest University professor working on the trading costs study for the Zero Alpha Group.

Also, these costs vary greatly from fund to fund, with the highest costs built up by funds that trade actively in hopes of outperforming the stock market. The Zero Alpha Group urges investors to take a passive approach, investing through stock index funds, for example, that reflect the broader market.

Among the group’s complaints is that these trading costs aren’t disclosed.

Putnam said in January that it would start reporting its funds’ brokerage commission costs in the prospectus, which is given to investors when they invest and is updated annually. Otherwise, brokerage commissions are reported in a fund’s statement of additional information, which investors don’t see unless they ask for it.

Funds make no effort to report their other trading costs, including spread costs and market impact costs.

Nor would it help to try, said Harold Bradley, an American Century fund manager who also has been the company’s head equity trader and has testified to Congress on trading costs. Bradley said the factors in such an equation would demand a super computer to solve.

Fund’s brokerage commissions are getting added attention because they’re not always used to buy stock trading services.

In a practice called soft dollars, some fund companies agree to trade through a broker in exchange for the broker using some of the commission money to provide research services to the fund company.

Critics argue that these costs ought to be paid by the fund company out of its management fee rather than by the fund itself through commissions.

In raising questions about fund fees, Spitzer also has offered solutions.

In Senate testimony in late January, Spitzer repeated his earlier call to include details about fund costs on customers’ regular fund account statements. The statement should not only show the dollars paid but also how many went to advisory fees, management fees, marketing fees and administrative costs, Spitzer said.

New rules on fund fees and disclosures are pending at the SEC and the NASD, which is an industry body that regulates brokerage firms and brokers under the SEC’s oversight. The Investment Company Institute has endorsed some of these proposals.

The Zero Alpha Group wants commissions and other trading costs included in the expense ratio, which is the number Morningstar tracked.

John C. Bogle, the founder of the Vanguard Group who steadily takes on fund industry practices, called on the Senate last month to order an economic study of the fund industry. He wants the SEC to look into “the revenues and expenditures of mutual funds and their managers, taking into account all management fees, sales charges, transaction costs and other income, where they are spent, and the remaining manager profits.”

Investors may feel overwhelmed trying to keep up with the deluge of competing information and viewpoints on fund costs and disclosures. Many invested in funds partly to avoid this burden.

But being aware of fund costs does matter – and new rules and disclosures may spark reform and competition that will benefit fund owners.