Comments on: Another Reason to Distrust the Fund Industry

By: Canadian Couch Potato

Canadian Couch Potato — Wed, 21 Jul 2010 05:07:59 +0000

Gail Bebee has suggested the following sliding risk scale that could be used in the Fund Facts document. It’s based on the worst 12-month return ever posted by the fund:

Low: >0%
Medium Low: 0% to -10%
Medium: -10% to -20%
Medium High: -20% to -30%
High: More than -30%

By: Canadian Couch Potato

Canadian Couch Potato — Tue, 20 Jul 2010 20:17:50 +0000

@Bruce: Do your clients pay advisory fees directly to you? I think most of us would agree that this compensation model is more transparent and less conflicted than the usual practice of burying these fees in the fund costs.

I don’t think any reasonable person would paint all advisors with the same brush. Unfortunately, even honest and conscientious advisors may have their hands tied by firms that only allow them sell a limited inventory of high-fee funds.

By: Bruce Loeppky

Bruce Loeppky — Tue, 20 Jul 2010 17:32:38 +0000

I agree that the proposed Fund Facts document could be done better & most of Ken’s suggestions are valid.I also agree that most prospectuses don’t get read because of the length & legalese.I find Warren’s comment quite offensive in that he seems to be painting all financial advisors with the same brush.I invest almost all client assets in Front End 0% whereas I could easily convince most clients to invest in DSC funds which would pay me more(but esssentially lock client into fund company for 6-7 years unless they paid managmnent fees to get out).We are already working in a complicated industry & misleading comments such as those don’t help anybody.

By: Financial Cents

Financial Cents — Tue, 20 Jul 2010 14:18:57 +0000

Who doesn’t like pretty charts and graphs? Words like this never sound good to me….”Despite the serious concerns of these investor advocates, the CSA has decided to press on with its flawed proposal.” Nothing good can come of that. Good post Dan.

By: Warren MacKenzie

Warren MacKenzie — Tue, 20 Jul 2010 13:39:13 +0000

Another problem is that all this talk diverts attention from a more serious problem which is that investors think they are dealing with a fiduciary who puts a client’s interest ahead of his own – and in fact they are dealing with a salesperson.

By: Marz

Marz — Mon, 19 Jul 2010 13:26:21 +0000

But the fund facts (from your example) look so pretty! Surely something so clean and organized is also trustworthy! IT EVEN HAS PIE CHARTS!