Fund name changes a headache, say advisors

Fund name changes a headache, say advisors

Fund name changes a headache, say advisors

Portfolio name changes are nothing more than window dressing, suggests one Ontario advisor.

In fact, financial planner and coach Daniel Hanzelka, suggests companies are using re-designations to disguise the need to consolidate funds that haven’t made it on the market. Unfortunately, the industry trend leaves investors confused and advisors overworked.

 “It makes the advisor’s job more difficult because they have to answer questions and try to tell the clients what is going on,” he says. “Advisors have to do due diligence to find out if (the name change) is in the best interest of the client.”

Pinnacle Portfolio’s move to change several of its portfolios names this week was duplicated by Scotia Fund, Scotia Private Pools. Both companies claim the re-designation will provide consistency to their product line-up and that there will be no changes to investment objectives or strategies. But, Hanzelka doesn’t believe this is the case.

“(Companies) introduce new funds and have to close them down due to lack of interest,” he says. “It’s not really to clarify things. Mutual fund companies are more interested in marketing.”

Fee-only financial advisor Mike Bayer agrees, adding that it all comes down to making a buck.

“It’s about revenue," he says. "That’s their (the companies) primary concern, and pleasing executives and their shareholders. That’s what drives the industry and unfortunately that means that a client’s interests are not put first.”

Hanzelka says this practice is just another reason why an overhaul to the financial services industry is taking place.

“Mutual fund companies are pushing things onto the advisor,” he says. “People are getting frustrated with it and people are getting restless.

"The positive thing is that the market is pretty stable right. If the market goes into havoc there will be bigger issues.”


  • Gdn 2013-11-29 9:07:59 AM
    I make sure I never buy fund of the day. Can't say this story topic has never happened, but it happens a lot less often.
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