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Wealth Professional | 04 Nov 2015, 09:00 AM Agree 0
Forcing funds to highlight out-of-the-ordinary MERS could be good for both advisor and client
  • Debbie | 04 Nov 2015, 09:51 AM Agree 0
    "Frankly I am insulted a fund company would think that advisors could be so easily bought.” but according to the study advisors apparently are.
  • Wealth Advisor | 04 Nov 2015, 10:22 AM Agree 0
    A shame based list??
    Highly doubtful that will happen.

    I think the SROs have to step up to plate and look at this way: If we can't regulate ourselves -somebody will regulate it for us.

    We could go back full circle and bring back front-end loads of 5%. That would certainly fix the trailer problem although I suspect the holding period of the average fund might decline. MERs of course are completely unaffected by steep loads.

    I do note that 8% loads were acceptable in the 1980's, perhaps 4% in the earlier 90's and 0% in the 2000's. Therefore if maximum total remuneration is capped today at 1% then what should it be in 2020?

    As only 10% of fund companies have trailers > 1.0 the obvious question is this:
    What dollar amount in percent is > 1.0%, greater than 1.25%, greater than 1.5%, etc. Draw up a bar chart, binomial distribution curve. Let's see some sigmas and determine if Cummings report conclusions have any merit. Personally, I think the report reiterates the obvious; that some sales are skewed by higher remuneration. However, is it significant? is the problem really a problem or an outlier. If it is an outlier is far easier to deal with a handful of firms directly rather than eviscerating the entire investment industry.
  • Graham | 04 Nov 2015, 12:22 PM Agree 0
    Reminds me of a story an older broker told me who worked in Vancouver many years ago. Said you could eat a free lunch every day as one company or another was doing a presentation pitch to brokers. The worse the investment, the better the lunch. The speculative wild junior resource companies served steak and lobster. The good quality companies served sandwiches. Sounds like some fund companies are trying to serve steak.
  • Kathy Waite Your Net Worth Manager | 04 Nov 2015, 12:25 PM Agree 0
    I think sales are influenced by the training provided by dealers to new advisors and the risk attitude quiz that produces an allocation filled with their own funds, Add in which road show went through town last week ( at the Advocis lunch and learn they sponsor ) I often see statements with a fund in a certain year and laugh as I recall it being flavour of the month then. Dan Bortolotti Canadian Couch Potato of PWL Securities calls its the " advisor six pack" and more get added, often not sold later even if not DSC
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