Broker Fees from Mutual Funds Affect Advice; Predict Worse Performance, New Study Says
TORONTO, ON – Brokers are supposed to recommend investments that are in the best interests of their clients.
But a study published in the February 2013 issue of the Journal of Finance has found that mutual funds offering higher broker fees attract the most investments, especially when the broker is not affiliated with the mutual fund company. Every additional dollar paid to a broker corresponds with another six dollars invested into the fund, and another fourteen dollars if the broker is an unaffiliated third party whose compensation depends exclusively on sales commissions. (more…)