The brokerage industry in general likes things as they are and would certainly make less money if the trailer
portion of mutual fund fees were not in place.
In short, IFIC is critiquing our paper «
Dissection of mutual funds fees, flows and performance» (co-authored with Sofia Johan and Yelin Zhang at York University's Schulich School of Business) by saying it is inconclusive due to the type of data we examine.
In a
study of mutual fund fees conducted between 2010 and 2015, Morningstar Inc. found that the highest proportion of «successful» funds (i.e. those that both remained open and outperformed their peer group) are predominantly from the lower - tier categories for fees.
In contrast to the usual professional portfolio manager, who may charge 1 per cent up front plus transactions fees and perhaps a
layer of mutual funds fees up to the average level of 2.6 per cent for stock mutual funds, robo advisors may just offer very low fee exchange traded funds and a very low robo charge.
We previously commented on the empirical methods in the Investor Economics report in our comment letter on the OSC webpage entitled «Frequently Asked Questions about the
Dissection of Mutual Fund Fees, Flows and Performance Report», and as such I will not repeat those comments here.
One of the biggest examples of the industry reacting to changing investor tastes was the move by Investors Group to lower
some of its mutual fund fees.
For example, the Dissection
of mutual funds fees, flows and performance (Cumming et.