The top U.S. securities regulator pushed on Thursday to reform mutual fund fees that traditionally used to stimulate fund growth and help cut shareholder expenses.

The so-called 12b-1 fees, charged by mutual funds for marketing and fund promotion, have been criticized for no longer serving their original purpose.

When it comes to these fees, there is a need for more fundamental change than merely disclosure reforms and a name change, Securities and Exchange Commission Chairman Mary Schapiro said at a consumer conference.

We must critically rethink how 12b-1 fees are used and whether they continue to be appropriate, she said.

The fees were adopted in 1980 after a period when mutual funds were experiencing huge net redemptions. Their purpose was to stimulate fund growth, promote a more stable fund asset base and create economies of scale that would reduce shareholder expense.

But critics say the fees are often used to cover administrative expenses or the initial commission costs rather than the fund's advertising and distribution costs.

Of course, in 1980, they may have made sense; but after 30 years of growth and change in the mutual fund market, it is past the time to reassess their need and their effectiveness, said Schapiro who has asked her staff to craft recommendations for the commission to consider next year.

The SEC's review of the fees began under Schapiro's predecessor Christopher Cox, who has said there is an opportunity to give mutual fund investors clearer information so they know how much they are paying in marketing, advertising and distribution fees.

The problem is that our investor may have no idea these fees are being deducted or who they are ultimately compensating, Schapiro said.

That's why I believe there needs to be a better approach, she said.

(Reporting by Rachelle Younglai, editing by Gerald E. McCormick)