Regulation Best Interest Meets Opaque Practices
In recent years, investors have increasingly purchased mutual funds through new share classes that jettison two traditional sources of potential conflicts of interest: explicit fees for distribution and front-end loads that are shared back with brokers.
Conflicts of Interest in Mutual Fund Sales: What Do the Data Tell Us?
Conflicts of interest can arise when financial advisors and brokers have a financial incentive to recommend certain products to investors. Identifying the effects and quantifying the costs of conflicted advice is a challenge for researchers and regulators alike.