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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsMutual fund advisers recommend based on commissions, not performance, new study says
Source: The Globe and Mail
U.S. mutual fund advisers consistently recommend funds that pay them higher commissions, but which often underperform for clients, a newly published study shows ... .
The study, led by Susan Christoffersen, an associate professor at the University of Torontos Rotman School of Management, demonstrates a tendency for advisers to recommend mutual funds that pay them greater fees, rather than ones that best suit clients portfolios.
Published in the February issue of the Journal of Finance, the study uses filings from the U.S. Securities and Exchange Commission from 1993 to 2009, and is believed to be the first of its kind to use hard data to explicitly draw a link between advisory fees and investment performance.
The study reopens the debate on how well the industry serves its clients, and spotlights the need for investors to scrutinize their funds fee structures to ensure their interests are being served.
Read more: http://www.theglobeandmail.com/globe-investor/funds-and-etfs/us-adviser-fees-trump-funds-suitability-for-investors-study/article7982308/
Egalitarian Thug
(12,448 posts)taking advantage of a client? Absurd.
Squinch
(50,957 posts)Egalitarian Thug
(12,448 posts)customerserviceguy
(25,183 posts)I mean, investment advisors, surely the most honorable of professions, right?
Squinch
(50,957 posts)But they seem so sincere!!!
Go with the index funds if you are going to go with Mutual Funds. Not only do they cost less, they often perform as well or better.
Honeycombe8
(37,648 posts)THAT needs a study to know that?
Dawson Leery
(19,348 posts)The financial shysters are looking out for themselves.
Three words: "no load funds".
A HERETIC I AM
(24,371 posts)If you know what you're doing and what you're looking at.