Wednesday, June 17, 2015
Kenmar Commentary on the CSA commissioned Fund Fee Research Report
Dealer / advisor conflicts-of-interest are top of mind for regulators and investor advocates.Conflicted advice can skew recommendations that are not in the best interests of investors , thereby impairing savings and retirement accounts. The CSA commissioned third party research into the impact of advisor compensation on advisor recommendations.The Researcher was to conduct a literature review to evaluate the extent, if any, to which the use of fee-based vs. commission based compensation changes the nature of advice and investment outcomes over the long term. Following a competitive procurement by the CSA, the Brondesbury Group was contracted to conduct this research. The Brondesbury Group has now completed their work and their findings are set out in the Mutual Fund Fees Research report which is the basis for our commentary. The report concluded that there is sufficient evidence of skewing to consider regulatory reforms.Indirectly, the report also points to the need for the standard of advice giving to be examined since a change in compensation model alone cannot satisfactorily resolve the core issue.Read our Commentary on the Report which is made from the perspective of the retail investor.