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Cashing out?

Globe and Mail Update

Redemption fees add insult to injury ...Read the full article

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  1. D Light from Toronto, Canada writes: Rob, you missed a key point with regard to Rear Load funds. This is the option pushed by "full service" brokers who get a hefty upfront commission from the mutual fund companies. This aspect would be well worth exploring in further detail - especially with regard to the level of disclosure the brokers provide their customers.
  2. go west from Canada writes: Anybody holding DSC funds should ask themselves if their advisor had their best interest in mind when they received 5% ! of your money for selling that fund to you.
  3. Canada Investor from Toronto, Canada writes: The real outrage is not original cost vs. market value redemption fees... it is redemption fees themselves. Advisors continue to place individual investors in these fee-heavy products when low cost alternatives exist (that beat mutual fund performance overall). Please get educated and learn the alternatives people! If you can't do it yourself, please search for an advisor who will honestly outline the alternatives vs. feathering their bed with your retirement funds.
  4. If I had a million lobsters from canbabwe, Canada writes: Better yet talk to your friendly big 5 banker who will put you in free Mutual Funds with no-load.

    The financial advisory industry is the biggest scam out there. Do the right thing, manage your own portfolio.

    It's not that hard, most people are simply lazy.
  5. J Tenner from Canada writes: Free mutual funds If I had a million lobsters??
    that is simply untrue..they still have MER'S don't they?
    hardly free if you ask me
  6. Karen Diamond from Winnipeg, writes: I am a financial advisor and I agree with the comments from your readers! You are unfairly targeting the fund companies as being at fault in this situation. Rather, it is the industry norms that make it possible for a sales-oriented 'advisor' to take the money and run, leaving the client to pay the price. I don't dispute that a financial planner who offers comprehensive, ongoing advice and commits to doing so with a client over the term of the redemption fee schedule shouldn't get paid for the work that they do in servicing the client. But the way that commission and servicing fees are structured on mutual funds lends itself to the best 'salesman' getting all the compensation up front with no threat of 'chargebacks' if the client does not stay in the program or stay with the advisor. Not only is it not fair to the unhappy client to incur redemption fees but neither is it fair to a competent, committed advisor who wants to take over servicing the account for an unsatisfied investor, because they then have to do so for a reduced servicing commission if they don't want the client to incur redemption fees. Rob, I think you should be doing more stories to explain that in almost every case, the advisor has the OPTION to place mutual fund investments on a front-end 0% commission basis and get paid via a higher on-going service fee. Or, at the very least, the advisor has the option to use the new 'Low Load' structure, which is a compromise that more closely aligns the interests of both client and advisor. I think most clients don't realize that the issue of how mutual funds are sold by most advisors is NEGOTIABLE and those options should always be fully explained. We stopped using the old DSC method years ago -- and gave up revenue at our own expense. Between all the changes happening in the mutual fund industry, and the unpredictable needs for cash and income that come up for clients -- we don't want our hands to be tied in 'doing the right thing' for the client.

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