Quote:
Originally Posted by Enoch Root
The most obvious are proprietary mutual funds. For example, if you are dealing with TD, they are going to offer you TD funds first, and you can rest assured that they will never offer you RBC funds (or vice versa).
But it goes much deeper than that. There are relationships behind the scenes that aren't as obvious to the end purchaser. For instance, BMO might enter into an agreement with CI Funds to sell their products. The advisor might tell you that it isn't proprietary because it isn't a BMO fund, but the truth is that the firm is compensated, and the advisor is compensated for selling it (even if the compensation is simply soft dollars).
The easiest way to avoid these issues is to deal with a fiduciary-type advisor (purely fee based). To be clear and fair though, this is also a bit of a muddied issue. There are firms that claim to be purely fee-based, but aren't really.
It is not an industry that I am particularly proud of, frankly.
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Yes, but these products or mutual funds, that the bank sells, have invested a significant portion back into the bank, so in effect when the bank makes money on the products, by pushing them, then a portion flows back to the person purchasing the product. Is that not correct?.
Also the mutual funds are managed by competent investors, backed by analysts, either with the bank or by a third party. Is that not correct?