The investment industry is so riven with conflicts of interest and dominated by middlemen and -women that investors have little choice if they want the returns they deserve, according to Jack Bogle, the founder of the Vanguard Group. They need to be informed about fees and turnover, willing to vote with their feet and take pen to paper to complain.
Bogle has been speaking out against conflicts of interest for a long time, but he's not the only one concerned. Last year William Dudley, the president of the New York Federal Reserve Bank, said there was evidence of "deep-seated cultural and ethical failures at many large financial institutions."
The conflict at the heart of the entire industry's problem, Bogle argued, is that most mutual fund companies serve two masters: They are owned by public companies and so have a duty to maximize profits, which means charging investors more. But they also have a duty to individual investors, and the evidence is steadily rising that the clearest path to good returns is low fees.
Read MoreCNBC 25: Jack Bogle
"There's a dollar-for-dollar conflict between the two," said Bogle.
That conflict is mirrored throughout the industry—such as with stockbrokers who earn commissions for higher-priced products or the administrator of your retirement plan at work who might pay a lower plan cost in exchange for including higher-priced funds among your fund selections.
Investors in some ways have enabled the industry. As long as they're making money, they're happy. "In my experience, investors are much more interested in absolute returns than relative returns," said Bogle. But that means they're giving up some returns, and in down or even markets, it can mean that they lose money when they could have made it because of the high fees.
"If you're a management company, what do you want to do when your prime line of business is not doing well? You start a new fund and put a higher price on it and sell it," Bogle said.
Read MoreHow much hidden fund fees cost you
What do you do in response? The first step is to arm yourself with information. If you don't like what you hear or you can't get an answer, vote with your feet by shifting money to companies and funds in which you have more confidence. Then, Bogle said, it is in the public interest—and yours—to become a complainer.
"If you had a crowd of investors who said, 'Look, this is just wrong,' directors would have to listen, whether they want to know or not," he said.
Here are some key questions to help you stay in control of your investing life so you can become the confident complainer.
What am I paying in mutual fund expenses every year?
If you are an average American family, with mutual fund holdings of $120,000 a year, you're probably paying more than $1,500 a year for them. Multiply the expense ratio of each fund by the dollar value of your holding in it and add up each product. This will give you a rough idea, though not every cost is included in the expense ratio.
What percentage does the expense ratio take out of my income?
How much in returns did you earn last year on your portfolio? That should be reported on your statement. Look at the number you produced in answer to question No. 1 and compare it to your returns. If you're paying $1,500 for a return of $1,000—and it's been happening over several years—start asking questions.
Read MoreTop trends in mutual fund investing
Bogle and others advocate for the mutual industry to more clearly spell out fees in their prospectuses. If you do decide to advocate for change, look at the board of directors, locate the members who aren't affiliated with the fund company, and make a list of the changes you'd like to see in the disclosures.
What costs are taken out of my check from the time it arrives in your office to the time I sell the investment?
"What you're trying to get at," said Tim McCarthy, former president of Charles Schwab and former president of Fidelity Investment Advisor Group, "is, from the money I put in the account, how much makes it into the underlying investment?" Make sure you ask the question for the first year, for a typical year and for the last year to capture any front-loaded or back-loaded fees.
What is your benchmark, and are you meeting it?
Any investment manager, whether they are running something as large as a mutual fund or as small as an individual portfolio, should have a benchmark they measure themselves against, such as the S&P 500 or the performance of a university endowment. In the case of a mutual fund manager, you'll find the benchmark in the prospectus, or end-of-year reporting (you could also try calling the mutual fund if you don't want to weed through all the paper).
In the case of an individual investment advisor, you ought to be able to ask flat-out.
But beware. "Fund managers are unbelievably creative when it comes to benchmarking," said McCarthy. He described being out on a golf outing with a man who had developed a theoretical best 9, by taking some combination of his best par 3s, best par 5s and best par 4s. "I said, 'You're a fund manager, aren't you?'" McCarthy said. "And he was."
If your fund or portfolio manager sliced and diced when he or she calculated the returns—perhaps to conveniently exclude a down year—you could have a problem.
If you have a fairly large portfolio, it may be worthwhile to hire an independent portfolio-review company for $3,000 to $5,000, McCarthy said.
Will the selling points of this investment product be gone in the future?
Bogle said that he sometimes tells brokers who ask him for ethical advice to ask themselves that question. If, for instance, they are selling a fund based on the past returns, the answer might well be "no." The broker or advisor might be aware that an investment that's done well in the past isn't likely to do so in the future. "If they know it won't continue, that's unethical," he said.
You can ask your broker or advisor the same question, and you might flush out a telling response.
If the answers to any of these questions bothers you, it's important to act on the feeling, said McCarthy. You can ask the broker or advisor for more information, move your money, or in a case where you think it's warranted, complain to a regulator, either the Securities and Exchange Commission or FINRA.
Are the fees too high, and are the investment choices good?
Fees of 1 percent to 1.5 percent are high—and worth complaining about. Over the 40-year lifetime of a $100,000 investment, earning, say, 4.5 percent vs. 5 percent a year makes a $170,000 difference in the end value of the portfolio.
"Fees of 2 percent or more are truly egregious," said Mike Alfred, CEO of financial information company BrightScope.
To check out what your plan charges compared with plans of similar sizes, ask your plan administrator, typically a human resources staffer, for the costs of your plan and compare them with the costs of plans on BrightScope.com for companies of a similar size. Evaluate the quality of the funds in the plan by looking them up on Morningstar.
If your fees are high and the investment choices are bad, weigh both against any company match and the convenience of saving through your paycheck. If you want to lodge a complaint, your plan administrator is the person with whom to do so. If that doesn't work, try talking to an executive.
Does it matter? Probably more than you think.
DALBAR, a Boston-based research firm, calculates what it calls the investor-return gap. Based on mutual fund flows over the past 20 years, it says investors typically earn 4 percentage points lower than the S&P's return, 5.02 percent on average for investors vs. 9.22 percent for the S&P.
The gap has to do with a host of factors, such as market-timing mistakes, when investors or their advisors pull money out of the market at the wrong time; also, fees taken by financial intermediaries, including commissions and management fees. If you're going to take control of your investments, you need to get a handle on both.