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Wealth Professional | 03 Aug 2015, 02:04 PM Agree 0
An increasingly volatile market has exposed another potential downside to those funds – something that could effectively tie an advisor’s hands.
  • Irv | 04 Aug 2015, 03:24 PM Agree 0
    The DSC will only be an issue if steps haven't been taken to counter these types of problems. What about having a portion of the account in non DSC if cash is needed? What about a transfer to a MMF if you want to get out of the market? It doesn't matter DSC or not, if the accounts haven't been setup properly there can be problems.
  • Bruce | 04 Aug 2015, 03:54 PM Agree 0
    An advisor is free to move between differing DSC funds without a penalty to the client. Please explain why you see a problem.
  • Susan McArter CFP | 04 Aug 2015, 05:40 PM Agree 0
    This is a ridiculous article and obviously the writer does not understand Mutual Funds. Yes if you invest with Fidelity Funds DSC you have to remain with that Fund company until the DSC schedule has matured or cause unnecessary fees to your client to move to a new Fund Company. However I am not restricted to move investments from Equities to Cash or Bond or Balanced Funds if the market so dictates. This is called a switch and is done at no charge to the client. If you are a credible and ethical Advisor you would not churn a clients investments and you would see your clients on a regular basis. Because yes markets do change. In the IROC world every time a change is made a fee is paid by the investor. This does not happen in my world. All the nonsense concerning fees and DSC that is not accurate needs to stop. If your going to write something it should be un bias and factual.
  • Advisor using DSC | 04 Aug 2015, 06:36 PM Agree 0
    First of all, this statement :"DSC funds spike investment management fees and challenge the ability of advisors to recover a profit for their investors" is wrong.

    I use DSC funds in my practice (LL4) and the conventional DSC structure. The MERs are the same (FE, LL4 or DSC) so this does not cost more money to my clients. And the upfront commission is paid by the fund company and not by my clients. (unless they divert from the plan and decide to cash in the money before the set time). That statement would be true if we were talking about the FE version where an advisor could charge up to 6% upfront.

    I would also add that in time of market volatility, my clients are not stuck with that fund for life...they can switch to other funds within the same company at no cost. This makes rebalancing a non-issue. So I strongly disagree with Mr. Danielak's comment.

  • Dave Macaulay | 05 Aug 2015, 06:15 AM Agree 0
    I think Martin may want to review the prospectus of a number of fund companies a little closer. All of the major fund companies allow transfers between funds of the family. DSC to DSC without incurring any DSC charges and without starting a new DSC schedule, This is a totally unfounded concern in most cases.
  • Niki | 10 Aug 2015, 01:04 PM Agree 0
    When in doubt--look at the source. If you know the type of assets some folks are into--then one would understand where they are coming from.

    Once upon a time, in regards to MF companies, there was a difference between the MER/TER of a DSC or an FE load.

    All of the companies I deal with have no difference between the MER/TER of a FE and back end (whether Low Load or Deferred sales charge). The difference is in the size of the trailer on anything deferred--anything deferred pays a smaller service fee to the broker/dealer--typically 50% lower than the front end trailer.

    Bias in favour of FE means the broker gets the commission and a higher service fee. Sure they can sell out for nothing.

    One should keep in mind the necessity of an exit strategy and getting out, when it is the right thing to do, should not be a barrier to exiting when there is A) transparency and B) it is the right thing to do for the client at that point in time, and C) there is no other option available to the client and D) fits within their risk tolerance, goals and objectives.

    Fact is, only those who are not keeping up to the Industry sell their products against the options available in managed money useing outdated or obsolete information.

    Without discrimination, this type of misinformation IS what I believe the Industry has been trying to address within the new CRM2 transparent metrics.
  • Donald Demchuk | 10 Aug 2015, 01:10 PM Agree 0
    Seems the writer is trying to bash DSC funds. Not only can you transfer DSC to DSC of any fund we carry but you can also take out 1% per month. That is $2,400 on a modest $240,000 retirement portfolio, if the need arose.
  • Richard | 10 Aug 2015, 02:09 PM Agree 0
    This article is ridiculous, not only can you transfer DSC to DSC without any charges if you really manage your clients portfolio every year you can transfer up to 10% of your portfolio to the NL. So if you did that every year and for on reason or another your client needs access to funds or wants to transfer out than a good portion of the portfolio would avoid DSC. I've been in business a very long time and never had an issue with DSC and my clients never had an issue either.
  • Robert Roby | 12 Aug 2015, 06:58 PM Agree 0
    What is in your closet?
  • Dan Boyd | 14 Aug 2015, 10:22 AM Agree 0
    enough said about the media continuing to spout off at the mouth without knowing the rest of the story . I would expect better from an industry source that should never have published this piece without editorial review to get the facts correct
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