Does the financial services industry need fixing?

Jonathan Chevreau wrote in the Financial Post on October 1, 2003, about a book entitled “The Professional Financial Advisor” that suggests you ask about funds that pay no trailer fees. He quotes the author Advisor John De Goey as saying “The financial services industry is largely broken and desperately needs a fix. Regulatory reform is clearly required.”

Jonathan writes that the book is the biggest exposé of Canada’s mutual fund industry since Daniel Stoffman’s The Money Machine. It’s the book Glorianne Stromberg might have written if she’d been an advisor instead of a lawyer and regulator.

Jonathan comments that De Goey suggests you can make your supposedly independent advisor “squirm” by asking them about ETFs or fund families such as Chou Funds or Phillips Hager & North. Advisors will do “everything they can to dissuade clients from buying these types of funds because they offer no embedded compensation.”

He says other products your friendly fund salesperson may avoid include individual stocks, income trusts and Canada Savings Bonds.