RESEARCH :The Financial Education
Fallacy by Lauren E. Willis
Suggests
that investor education could be a cover for industry wrongdoing . Read the full article
This web site is dedicated to investment fund investor education and protection. The multi-billion fund industry plays a key role in the savings and retirement plans of millions of Canadians. Many industry practices provide beartraps for the unsuspecting investor and securities regulations have not kept up with the pace of change in the industry.
Sunday, June 30, 2013
Tuesday, June 11, 2013
Eliminate Embedded commissions ..Professionalize investment advice
Embedded commisions are the source of a lot of problems for retail mutual fund investors. In this short paper we explain why Read the full article
FOOTNOTE:
FOOTNOTE:
"Assuming
that both approaches cost the investor the same amount,
most investors (59%) continue to prefer to pay fees that are part of
their mutual funds, while 33% would prefer to pay for advice
separately.” Source:
Canadian Investors' Perceptions of Mutual Funds and the Mutual Fund
Industry 2011 report . The Report notes “The general preference for
including advisor compensation in the structure of the mutual fund is
constant across all demographic groups and investor types. For
example, higher value investors are no more or less likely to support
this approach. There are also no significant differences related to
investor age or the size of their investment account." [ Better
fee disclosure and performance reporting may alter these numbers. ]
Wednesday, June 5, 2013
Research: The Arithmetic of Investment Expenses by William F. Sharpe
Research: The Arithmetic of Investment Expenses by William F. Sharpe
ABSTRACT Recent regulatory changes have brought a renewed focus on the impact of investment expenses on investors’ financial well-being. The author offers methods for calculating relative terminal wealth levels for those investing in funds with different expense ratios. Under plausible conditions, a person saving for retirement who chooses low-cost investments could have a standard of living throughout retirement more than 20% higher than that of a comparable investor in high-cost investments. In other words fees count.High fees plus conflicted advice= Freedom 75. With higher Canadian fund expenses , the impact on retirement savings is much higher.Read the full article
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