Posts filed under “Mutual Funds”

I wanted to spend a bit of time on the Labor Department’s proposal to place a fiduciary obligation on those who manage or provide investment advice on retirement plans. These include individual retirement accounts and 401(k)s (including 403(b)s). The new rules require the broker or adviser to “operate in the best interest of the client.”

I don’t want to rehash all of the reasons why this is a very good idea — I did that last year in an article with the headline “Find a financial adviser who will put your interests first.” Instead, I want to explain why fiscal conservatives should rally around this idea as a way to hold down taxes.

I first discussed the lack of a fiduciary duty in 2013. The context was a proposal in the U.K. that was going to cap retirement-plan fees. Those rules were passed, and starting in April, annual charges on British workplace pension plans with automatic enrollment are capped at 0.75 percent.

The conservative ruling party in the U.K. did this to save future taxes, as you will see below.

The proposed fiduciary rules are not an explicit fee cap, but they would require that “any fees and costs paid by the client be reasonable for the services provided.” It is probable that the “best interests of investors” will mean athat fees will be reduced from today’s often-excessive levels. If you doubt this, then perhaps you might explain why Wall Street has spent millions of dollars lobbying against the fiduciary standard. They KNOW just what the net result will be — lower fees to brokers and advisers.

 

Continues here

 

 

 

Category: Index/ETFs, Investing, Mutual Funds, Really, really bad calls

Bill Gross Defends His Record

Last year was a time of change and controversy for Bill Gross: His unplanned exit from Pacific Investment Management Co. in September, a whisper campaign before the palace coup, a new job at Janus Capital. Amid all this, Gross is most upset about one thing: Despite 40 years at the top of the fixed-income world,…Read More

Category: Fixed Income/Interest Rates, Investing, Mutual Funds

10 Truths Mutual Fund Firms Won’t Admit

Wow: 10 things mutual fund companies won’t say 1. “Cheap funds often outperform pricey ones.” 2. “We can’t beat the market.” 3. “When skill fails, we just double (or quintuple) our odds.” 4. “People aren’t buying our product…” 5. “…except when we pay them kickbacks.” 6. “Hedge funds are our idols.” 7. “Our boards are…Read More

Category: Mutual Funds

Category: Mutual Funds, Think Tank

Free Lunch Over for Money-Market Funds

Of all the outrages endured during the financial crisis, perhaps the most perplexing involved money-market mutual funds. In an example of moral hazard writ large, this uninsured risk instrument — with $2.57 trillion in assets — somehow became too big to fail. Five years later, the Securities and Exchange Commission is finally taking steps to…Read More

Category: Mutual Funds, Really, really bad calls, Regulation

Dumbest Investing Ideas of 2014

The Worst Investing Ideas I’ve Heard This Year (so far) Barry Ritholtz Washington Post, July 5, 2014     As the second quarter comes to an end, my top 10 list of dumb investment ideas is filling up. All of these would be fairly foolish in any year. (Feel free to explain to me why…Read More

Category: Investing, IPOs, Mutual Funds, UnGuru

The Mutual Fund Swap

This was written by Kris Venne, the Certified Financial Planner in our Asset Management group:   Its 3:35pm on a Wed., your phone rings – it is your “advisor” over at MerFargonley. Conspicuously its pretty close to month end, say March 24th. “Hey Mike! Hows it going? How’s Sandy (your wife)? How about little Mikey?”…Read More

Category: Investing, Mutual Funds, Really, really bad calls

Skill vs Cost: The Myth of the Successful Money Manager

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managed funds

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Category: Digital Media, Hedge Funds, Mutual Funds

Shorter WSJ: Beware Target Date Funds

Missing the Target Source: WSJ   You may have missed the WSJ’s takedown on Target-date funds this weekend. Its a must. The idea of target date funds are a form of auto-pilot that automatically shifts allocations into more bonds less stocks as the investor ages. Target date funds now manage about $550 billion dollars. The…Read More

Category: 401(k), Investing, Mutual Funds

Investors Continue to Pick ETFs over Active Funds

Source: FT.com   This was part of theme of my presentation this week — while equity markets in general have seen huge outflows, ETFs in general — and Vanguard in particular — have seen large inflows .  . .    

Category: ETFs, Investing, Mutual Funds