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Old 12-30-2016, 09:32 PM   #15
Could Care Less
heep223's Avatar
Join Date: Sep 2013

Originally Posted by Slava View Post
Well I am a financial planner (CFP) who doesn't just push mutual funds. I use funds sparingly overall, but there is a time and place where they're the best option.

I do find that general view of the industry discouraging though because there are some advisors who are doing that, and they're in general doing a disservice to the industry as a result. I don't know when you met with advisors, but over the past couple of years rules surrounding disclosure have changed significantly. People are made aware of exactly what the fees and costs are, and this is tightly regulated. That disclosure applies specifically to mutual funds and in my practice I disclose as much as possible regarding fees and commissions.

The majority of advisors and brokers are not qualified to give financial advice. 95% of registrants in Canada are registered as salespeople. The entire industry is designed around the wrong incentives that put sales people interests ahead of investors. It shouldn't be such a huge step to have advisors actually disclose what they're being paid. When you're getting paid higher trailers on one product over another, that right there destroys any semblance of alignment. Combine that with the fact that advisors and brokers don't have a legal obligation to put their clients interests ahead of their own. There's a suitability standard but it's so loose and vague that most just ignore it.

You shouldn't be able to take a few CSI courses and immediately be able to call yourself a financial advisor. Our investment advice industry is a disaster tbh. I don't know why people aren't more pissed off about it in general but my guess is that most don't even know what questions to ask. It's become an industry filled with people trying to justify their own existence. Fascinating to watch really.

With the emergence of low cost indexing and self directed investing we are seeing a great democratization of the industry and it's only now just beginning. Now we're seeing the ugly truth about stock picking in highly efficient markets.
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