Morningstar Advisor - April/May 2011 - (Page 10)

On Topic What Can the Mutual Fund Industry Do Better? Let us know your thoughts at “Quit worrying about weekly flow and developing funds and marketing gimmicks for whatever is currently hot. The industry needs to “Lower fees. Clients who use advisors should not have to pay retail prices for their fund choices. Fees are about the same now as they were 20 years ago, even though with economies of scale costs should have come down dramatically.” Don Vanlandingham Guardian Wealth Management Chattanooga, TN Quick Poll (given March 2, 330 responses) 1 Based on the quality of its products and services, what grade would you give the mutual fund industry? A B C D F 13% 55% 26% 5% 1% focus on their fiduciary responsibility to their fund shareholders. Tenured management, low turnover, reasonable cost, and consistency should be the main focus of every firm (and part of their marketing). If they all did that, the consumer would be better served. In addition, the industry (Morningstar included) needs to do more than write a few ‘advisor’ articles politely discussing the half truths on indexing. In summary, I would be better served by the industry if I could spend far less time ‘deprogramming’ clients. “Provide more information on valuations. I would like to see more of their assessment of the economy and earnings and growth expectations of global equity sectors.” Ty Haberling Haberling Financial Group Kennewick, WA 2 What should mutual fund companies do better? Focus more on fees and costs Be more transparent Offer new types of strategies (other than long-only) Improve investor education Make portfolio managers more accessible 3 Is the industry responsive to the needs of advisors? Yes, mostly Sometimes 44% 46% 32% 19% 11% 8% 5% Limit gimmicky, superfluous new fund offerings 25% The industry and media focus on today, flow, indexing, and ratings. This causes clients to focus on all the wrong elements of planning and investing.” Gregory Schill, CFP The Advisory Group Manhattan Beach, CA “One, do more serious, ongoing diligence on their investment managers and replace them if they “Mutual funds need a better way to get their information to the advisor in a way that is succinct and comparable. That’s what advisors want, but I’m not sure the mutual funds want that as a solution. They seem Fund companies seem indifferent to my needs 10% 4 Agree or disagree? Over the next 10 years, mutual funds will continue to provide the bulk of returns that will help my clients meet their financial goals. Agree Disagree 5 Would you consider purchasing vehicles domiciled overseas, such as UCITS, if they provided strategies not available in U.S. ‘40 Act funds? Yes No 43% 57% 75% 25% more interested in building a better mousetrap.” show extended periods of underperformance against their benchmarks. Two, lower management fees commensurate with increase in asset sizes of the funds. Three, put managers on the same side of the table as investors by restricting their ownership of equities to their own product.” Scott Greenbaum Life Goals Asset Management Harrison, NY Albert Eck ESP Wealth Management Springfield, IL 10 Morningstar Advisor April/May 2011

Table of Contents for the Digital Edition of Morningstar Advisor - April/May 2011

Morningstar Advisor - April/May 2011
Letter From the Editor
The Debate That Matters Most
What Can the Mutual Fund Industry Do Better?
Cool Logic, Warm Intent
How to Start a Mutual Fund
Owner and Operator
Middle East Revolts Roil Oil Markets
Four Picks for the Present
Investment Briefs
How We Improve Our Odds of Picking Outperformers
Health Care Survived 2010, but Investors Want Proof
The Global Fund-Leadership Playoffs: Europe vs. the United States
U.S. Fund Investors Have It Good
U.S. Fund Firms Learn to Speak UCITS
Balancing Act
The Tamer Ride
Investors Lend a Hand
Healthy, Wealthy, and Wide
Foreign Funds That Win at Concentration
Mutual Fund Analyst Picks
50 Most Popular ETFs
Undervalued Stocks With Wide Moats
VAs Finish 2010 With a Solid Gain
Buying Good Funds, Poorly

Morningstar Advisor - April/May 2011