Interesting Note from a Reader

Here is a message I received from an investment professional with over 15 years of experience in the financial services industry:

"There is no question that mutual funds a) act primarily as asset gatherers and b) walk a tight ethical line between fiduciary responsibility and profit generation (ie 12b-1 fees). These are prehistoric, inefficient entities whose mandate is too slightly outperform indexes, all the while creating new gimmicks to source more capital.

"However and unfortunately, these “asset managers” are the only ones with the scale to manage our money. While new competition from the banking industry and new products, like ETFs, are beginning to take market share, the foothold mutual fund have is fairly secure. As such, customers will continue to overpay for under-performance and be subjected to watching more television commercials showing an old married couple riding bicycles as a voice over talks about target date fund benefits.

"The Obama Administration has a full plate, but hopefully they will get around to taking a look at mutual fund practices. There are plenty of rumblings and hopefully, the momentum continues, even as the asset markets rally. With the baby boomer generation wanting and deserving to retire, retirement fund disclosure, clarity and fairness need to be continually addressed. It’s arguably more important than credit card consumer protection efforts.

"The simple matter is that given our few choices for retirement asset distribution, we are forced to overpay for under and lazy performance."