An excerpt from the above linked-to article by Ellen Roseman follows:
A retired couple sold their home in 2008, planning to use the sale proceeds for a new house that was still under construction.
They gave the $268,000 received from the sale to their financial adviser. And when the new house was ready in April 2009, they asked for the money to complete the purchase of their new home.
The adviser said the markets weren’t doing well and wanted them to delay. He had invested their money in medium- to high-risk mutual funds that had declined in value by $75,427 in the 10 months they owned them.
The Ombudsman for Banking Services and Investments (OBSI) said the mutual fund dealer should compensate the couple for their losses. The dealer refused to do so.
My disappeared online response to the above linked-to article follows:
What was it Bruce Livesey said, in “Thieves Of Bay Street,” which I’m sure Ms Roseman knows?: “Most people would assume that brokers or investment advisers make money only if their clients make money. Not so. Their compensation is based less on profits they generate for clients and more on chargeable fees and the amount of clients’ assets they have under management. In short, by the mere act of investing your money – whether that investment pans out or not – the industry prospers. In fact, it’s not uncommon for brokers and advisers to generate extra fees through “churning,” the daily or weekly buying or selling of securities just to earn commissions. To make matters worse, brokers have a built-in incentive to sell instruments with the highest hidden charges. “You could make twice the commission by putting your clients in a more expensive plan,” explains [Larry] Elford.” -pg 81
I watched my post get accepted automatically, which sometimes happens. About a minute later I added the title of Bruce's book to the post via the 'edit' button, hit 'save' and watched the post disappear. And the comments count went down by 1. Losers! It may still appear, but I have no reason to expect that.