Then 5% is not unusual for an equity fund. Bond funds tend to be lower, around 3% or so. The more you buy however, the lower the front end fees.
There are many people, including many on this board who will say that buying a so-called "front loaded fund" is a mistake and that the only Mutual Funds one should buy are those with no fees to purchase and low fees to own. While this is all fine and good in theory, what really matters is performance. If you pay no fees at all and get crappy returns, what have you got?
Crappy returns.
John Bogle, the founder of The Vanguard Group, made his living and his company on the idea that low fees are inherently better. The funny thing is, the largest Equity Mutual Fund in the world is a front loaded fund and it's performance on almost every measurement beats the crap out of the best of a comparable Vanguard fund. If you compare apples to apples in this regard, look at the oldest Vanguard fund and compare it to a similarly aged Equity Fund from the top 20 list (Easily found on Google) and you will see that the Vanguard funds are not all that special.
It really doesn't matter if the fees are 5% or 50% if you are getting returns you are happy with.
Keep in mind that every Mutual Fund company out there that offers front loaded A shares also offers C class shares. These have no fees to buy but a small fee (Typically 1%) to sell if the shares are held for less than 1 year. They carry slightly higher ongoing expense charges than A shares. Your broker can do a calculation (And if I remember correctly, is REQUIRED to do so and provide this information) that will show the break even point in years of buying an C share as opposed to an A.
Absolutely avoid being talked into buying a "B" class of Mutual Fund. These also have no up front load but have a sliding scale of sales charges - called the CDSC (Contingent Deferred Sales Charge) which can start as high as 5 or even 7% all the way to zero after 5 or even 7 years. They are also the most expensive to own. Some Mutual Fund companies have done away with C shares entirely.
One last thing - You often get what you pay for. When you buy a no-load fund from Vanguard or Fidelity for example, you are going to get VERY LITTLE advice. This is by design. It's part of how they keep their expenses so low. If you want guidance, you are either going to have to pay for it or meet account minimums.
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