Long time investor advocate and member of the Ontario Securities Commission investor advisory panel Ken Kivenko tells us how the mutual fund sales, distribution and advice system in Canada is fundamentally and critically flawed and what needs to be done about it in his latest post Eliminate embedded commissions and professionalize advice.
I must admit that I haven't paid much attention to mutual funds and have not owned any for many years since I became aware of the issues Ken so succintly and forcefully summarizes. So I was surprised to read in his piece that despite the industry going on about how the invisibly embedded commissions pay for advice, there is actually nothing in the industry standards about how and what advice must or even should be given.
FAIR Canada in its submission on mutual fund fees to the too-numerous (but that's another problem) Canadian securities commissions provides a longer and more detailed take on the required reforms.
There is lots more support for change on blogs and in the press, e.g. links in on the FAIR website, so maybe there is hope for change. Should reform happen, I might even consider mutual funds again.
Wednesday, 12 June 2013
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