Hidden incentive compensation can reduce performance too, But there's now a way to protect yourself.

The global financial services marketplace has been vendor-dominated since inception. This has led to pervasive conflicts of interest that too often limit choices and degrade investment results. Now there's a way for investors to protect themselves.

This article - Restricted Product Shelves, Proprietary Products And More - was written by Canadian, Ken Kevinko.  One publication described him this way . . . “might be Canada’s most resolute investor advocate."

In it he describes how "limited shelf space" he describes - the fact that investment advisors and brokers are too often limited in what they can recommend or sell to their clients too often degrade both their "advice" and the investment results their clients experience.

But this is not just a Canadian problem. It's global, with the U.S. financial services marketplace being a prime example. Both here and elsewhere, the financial services marketplace has been vendor-dominated since inception. 

While, Kevinko correctly points out, that the sale and recommendation of “proprietary products” represents one of the most obvious and egregious of the conflicts of interests adversely affecting investors, close behind are the incentive compensation arrangements that also limit the choices available to investors. 

Disclosures of these conflicts, while certainly better than nothing, do not remove them or their ill effects and, often, such disclosures are simply “glossed over” as “this is just another form that the regulators say we must present.”

Raising awareness of this, as Kevinko is doing, is important and very valuable. We're happy to help in more broadly circulating this important information here, in the U.S., where it's equally applicable.

More importantly, this is a problem that individual investors now have a way to solve.

Much like with ESG funds (accurately designated or not), our Retail Investment Tracking Application℠ (“Rita℠”) enables individual investors to see the opportunity cost of investing in the proprietary funds – the performance gaps between the highest ranking funds (of all available similar ones) and any mutual fund or ETF being recommended or sold (proprietary or not).

This new level of investor empowerment is the missing element that will ultimately force a beneficial change in the marketplace . . . and, most importantly, it will directly and immediately help you make better investment selections that help ensure a brighter financial future for you and your family.