www.insideHALTON.com | OAKVILLE BEAVER | Thursday, November 24, 2016 | 38 T Disconnect between investor client and investment manager here is a con ict of interest between the two major participants in the nancial services industry. I anticipate this con ict will continue. Speci cally, there is a disconnect between the investor client and investment managers responsible for managing mutual funds and other investment products. On the surface, it would appear that both investor clients and those who manage mutual funds would want the highest possible return. That is true in theory, but in practice, there are problems. The disconnect was in plain sight at the Dollars & Sense Guest Contributor Peter Watson Evidence-Based Investing Conference held in New York City this month. The conference was attended by nancial advisers who work directly with clients and with those who manage mutual funds and other forms of managed products. Hotel & Boutique Bed Bath Linens OUTLET OPEN TO THE PUBLIC The investment business tracks investment managers based on their return on investment as measured against a particular index. For example, if a manager invests in U.S. stocks then that manager's investment performance could be measured against the S&P 500, which is a collection of 500 stocks in the U.S. An investment manager's success at attracting new assets is primarily based on the returns they produce. A fund with good performance numbers one year usually experiences a signi cant in ow of new money the following year. New money means increased fees and the mutual fund company, and all those employees who participate in sharing those fees, are happy. In an extremely competitive business, good investment performance numbers are essential to the mutual fund's nancial success. New mutual funds are started on a regular basis and its average lifespan is about seven years. There is a strong correlation between the funds that cease to exist and poor performance numbers. Managers will boast of their stellar performance but fail to acknowledge many of their funds with poor performance were discontinued. Because poor performing funds can be eliminated from their track record, it makes business sense for the fund company to continue to start new funds. That way, they can capitalize on some of the funds that will eventually have good performance results. Achieving excellent performance results is the prime goal of most managers. This is the way to achieve all-star fund manager status, and all the fame and money that will generate. see Evaluate on p.40 60% OFF OMLAND HOSPITALITY 905-858-3456 UPTO Gifts Under $50 "It feels good to know it's all taken care of." Over 70% of people polled* admit it... they don't know the details of their partner's funeral and cemetery wishes. How about you? Thinking ahead makes sense, so discover your options. Discuss it with your loved ones. Pre-planning is easy with the Family Registry Estate Planner from Arbor Memorial. 2905 Argentia Rd Unit 7, , Mississauga (Just east of Winston Churchill Blvd. & South of Hwy. 401) OUTLET STORE HOURS MON-FRI 10 am to 6 pm SAT 11 am to 5 pm FREE TANNING NOVEMBER 25, 26, 27 (18+ Id required) Arbor Memorial Inc. Call today to order your FREE Planning Kit 905-257-1100 glenoaks.ca Glen Oaks Funeral Home & Cemetery by Arbor Memorial 3164 Ninth Line (403 & Dundas St.) Mississauga/Oakville, ON * Arbor Memorial Inc. survey of 1,033 Canadians conducted by Environics Research Group Ltd. in August 2015 Great deals on lotions & tans Since 1967 Home for the Holidays... Call uS for an aPPoinTmenT upholstery & design www.baiers.ca Deck the Halls with something new! tanwild.com 905.338.2700 511 maple Grove drive, oakville (Sobeys Plaza) 3 Minutes East of Whole Foods on Cornwall Rd. 1000's of Designer fabrics to choose Sofas · Chairs · Headboards · Throw Pillows · Drapery & Hardware 11-2345 Wyecroft Rd, Oakville · 905.616.3156 · info@baiers.ca