Trade group disputes finding on fund fees

MAY 07, 2007
By  Bloomberg
According to a poll taken last summer by Pollara Inc. of Toronto, 85% of Canadian mutual fund investors purchased shares through an adviser, and a concurrent study suggested they were getting bad advice. A draft report, “Mutual Fund Fees Around the World,” written by three university professors (InvestmentNews, Aug. 28) claimed that among the countries studied, Canada had the highest average mutual fund expense ratio (2.87%) — significantly higher than that of the United States (1.71%) and Japan (1.99%). Last month, Joanne De Laurentiis, president and chief executive of the Toronto-based Investment Funds Institute of Canada, sent an e-mail to the authors, Peter Tufano, Ajay Khorana and Henri Servaes — professors at the Harvard Business School in Boston, Georgia Institute of Technology in Atlanta and London Business School, respectively — disputing the conclusions of the report. “Regrettably, we have found many Canadian readers and commentators giving the study a ‘fact status’ that you may have not intended and that in its current form it does not warrant,” she wrote. “We would contend that the Canadian circumstance has been significantly misinterpreted in a number of areas within your current draft. “Comparisons made on the basis of 2002 data used in this study are already out of date,” Ms. De Laurentiis wrote. “In the time period between 2001 and 2005, [management expense ratios] are known to have fallen [by] between 3% and 11%, depending on the category.” No response to the e-mail has been received, according to the IFIC. — David Clarke

Latest News

SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees
SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees

Eliseo Prisno, a former Merrill advisor, allegedly collected unapproved fees from Filipino clients by secretly accessing their accounts at two separate brokerages.

Apella Wealth comes to Washington with Independence Wealth Advisors
Apella Wealth comes to Washington with Independence Wealth Advisors

The Harford, Connecticut-based RIA is expanding into a new market in the mid-Atlantic region while crossing another billion-dollar milestone.

Citi's Sieg sees rich clients pivoting from US to UK
Citi's Sieg sees rich clients pivoting from US to UK

The Wall Street giant's global wealth head says affluent clients are shifting away from America amid growing fallout from President Donald Trump's hardline politics.

US employment report reactions: Overall better than expected, but concerns with underlying data
US employment report reactions: Overall better than expected, but concerns with underlying data

Chief economists, advisors, and chief investment officers share their reactions to the June US employment report.

Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading
Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading

"This shouldn’t be hard to ban, but neither party will do it. So offensive to the people they serve," RIA titan Peter Mallouk said in a post that referenced Nancy Pelosi's reported stock gains.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.