Blogs & Comment

Fund industry proselytizing

Attempts by the Canadian mutual-fund industry to launch offensives against DIY investors and ETFs users to date have been judged by their targets to have fallen short and sometimes embarrassingly so as highlighted recently in a post by Canadian Capitalistand by others in previous instances. However, the next phase of the battle could get a little nastier if trends in the U.S. come north.
A Wall Street Journalarticlesounds the alarm over financial academic research sponsored by financial firms.In the example given, a paper sponsored by a distributor of annuities was quite laudatory of annuities.Finance professors say they dont let sponsors affect their findings but we might remain skeptical, suggests the Wall Street Journalarticle, given what happen with medical research funded by pharmaceutical companies.
Critics are particularly concerned about disclosure of funding sources. It may be in pint-size print or sometimes not even mentioned. There is alsothe issue of confidence in the findings of financial academic research on broader issues. It might thus be good practise to when reviewing such research to also take note of funding sources. (Hat tip to Ken Kivenko)