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Tue Jan 29, 2013, 08:09 PM

Mutual 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 Toronto’s 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/

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Reply Mutual fund advisers recommend based on commissions, not performance, new study says (Original post)
Newsjock Jan 2013 OP
Egalitarian Thug Jan 2013 #1
Squinch Jan 2013 #3
Egalitarian Thug Jan 2013 #7
customerserviceguy Jan 2013 #4
Squinch Jan 2013 #2
Honeycombe8 Jan 2013 #5
Dawson Leery Jan 2013 #6
A HERETIC I AM Jan 2013 #9
kudzu22 Jan 2013 #8

Response to Newsjock (Original post)

Tue Jan 29, 2013, 08:13 PM

1. Absolutely shocking! Who could've guessed? Somebody working in the financial industry

 

taking advantage of a client? Absurd.

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Response to Egalitarian Thug (Reply #1)

Tue Jan 29, 2013, 08:13 PM

3. We just posted the same thing at the same time!

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Response to Squinch (Reply #3)

Tue Jan 29, 2013, 10:32 PM

7. Jinx! 1 2 3 4 5 6 7 8 9 10

 


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Response to Egalitarian Thug (Reply #1)

Tue Jan 29, 2013, 08:17 PM

4. Yes, I'm absolutely gobsmacked!

I mean, investment advisors, surely the most honorable of professions, right?

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Response to Newsjock (Original post)

Tue Jan 29, 2013, 08:13 PM

2. Shocked. Shocked, I tell you! Financial people putting their own interests ahead of the customer??

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.

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Response to Newsjock (Original post)

Tue Jan 29, 2013, 08:39 PM

5. That headline is like saying, "Breaking: Study finds politicians cater to special interests!"

THAT needs a study to know that?

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Response to Newsjock (Original post)

Tue Jan 29, 2013, 09:34 PM

6. This should have been obvious by this point.

The financial shysters are looking out for themselves.

Three words: "no load funds".

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Response to Dawson Leery (Reply #6)

Tue Jan 29, 2013, 11:22 PM

9. Perfect.

If you know what you're doing and what you're looking at.

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Response to Newsjock (Original post)

Tue Jan 29, 2013, 11:15 PM

8. I'll just file this under "duh"

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