Britain’s mutual fund sellers will no longer be able to collect a commission on products they sell after 2012, under new rules implemented by the country’s financial regulator. They will also have to clearly disclose to clients exactly how much they receive in payment from the mutual fund companies, said the FSA in its statement. Here’s some more info from the UK’s Guardian newspaper.
Canadian investors would benefit from the same rules. Research company Morningstar published a report in May 2009 criticizing Canadian mutual funds for:
– charging high and complicated fees and for
– steering investors into the most expensive products.
Rather than gracefully accept good advice, the industry responded with shock and disbelief.
Until things change, investors should always seek out investment advisors who are upfront and honest about their fees.
Until next time,
26 March 2010