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Passing Shots

The Fifth Set Blog

Topics: Active Management, Active vs Passive, Asset Allocation, Brokers vs. Advisors, Conflicts of Interest, Efficient Market Hypothesis, Evidence-Based Investing, Fiduciary, Index, Long-term investing, Portfolio Management

Seven Bullet Points to Address Investor Client Standard of Care

The financial advice industry has long been separated between 1) Registered Investment Advisor firms (RIAs), which operate under the Investment Advisers Act of 1940 and whose representatives’ duty is to deliver investment advice, and 2) Broker-Dealers, whose representatives are in the business of selling financial  …read more »

Broker Conflicts of Interest and Municipal Bond Investments

Is it a coincidence that seemingly every prospective client’s taxable account currently managed by a brokerage firm includes the same two security types; expensive actively-managed equity mutual funds and individual municipal bonds? Viewed through the lens of massive conflicts of interest, it’s easy to see  …read more »

A Case in Point

Our prior blog post, “The Prediction Paradox”, outlined why investing the Wall Street way, by placing bets based on predictions, was a recipe for financial disaster.  A recent New York Times article presents the perfect case in point on the dangers of ignoring The Prediction  …read more »

The Prediction Paradox

In the summary description of the book The Signal and the Noise: Why So Many Predictions Fail – But Some Don’t, written by political forecaster, Nate Silver, there is a wonderful quote… “The Prediction Paradox: the more humility we have about our ability to make  …read more »

What’s In a Name? Advice From a Brand Name Firm May Not Be Everything It’s Cracked Up to Be

Many investors continue to believe they can feel secure that their finances are managed by a “brand name” firm such as J.P. Morgan.  Underlying this sense of security is a lack of understanding about how the brokerage business is structured.  Financial “advisors” employed by major  …read more »

Is your mutual fund a box of Corn Flakes?

Among the myriad of conflicts of interest shrouded by the brokerage industry are payments made by mutual fund companies to brokerage firms in exchange for accessing the brokerage firms’ mutual fund platform, often referred to as ‘shelf space’.  The payments, known in the industry as  …read more »