Latest / How Canadian Markets Work / Episode 86: Fund Regulation and Disclosure (The Five-Minute Audit)

Transcript

Episode 86: Fund Regulation and Disclosure (The Five-Minute Audit) · How Canadian Markets Work

0:00
You know from our last deep dive that when you
0:02
buy a mutual fund, you're buying into a daily
0:04
valued, forward -priced pool of assets, calculated
0:08
right down to the exact net asset value per share,
0:11
NADPS. But what actually stops the fund manager
0:14
from taking all that pooled money and betting
0:17
it on a single, wildly risky stock? And what
0:20
exact paperwork are you legally entitled to see
0:23
before handing over your cash? Yeah, um... I
0:27
mean, that is really the ultimate question here.
0:29
It's trust versus regulation. Right. Because
0:31
we spent all this time last session establishing
0:33
how the intricate machinery of daily pricing
0:35
works, right? Yeah. How your money gets pooled
0:38
together with, like, thousands of other investors.
0:40
Exactly. And how the accounting ensures you get
0:43
exactly the value you're owed. Right. But the
0:45
truth is, none of that plumbing matters if the
0:48
person holding the pool of money is legally allowed
0:50
to take it to, well, the financial equivalent
0:52
of a roulette table. Oh, for sure. I mean, imagine
0:55
handing a stranger your life savings. You have
0:57
this assumption that they're going to be responsible.
0:59
You'd hope so. Right. But if we are being honest,
1:02
human beings aren't always responsible, especially
1:04
when it's not their own money on the line. So
1:08
OK, let's unpack this. Let's do it. Our mission
1:11
for today's deep dive is to explore the invisible
1:13
legal guardrails keeping your investments on
1:17
the track. We're going to dig into the strict
1:19
legal boundaries that govern publicly offered
1:22
mutual funds Specifically a really sweeping piece
1:25
of regulation called national instrument 81 102
1:28
a very dense rule book Yeah, right and after
1:31
we figure out those rules. We're going to explore
1:33
what is arguably the most Highly engineered rigorously
1:38
tested two -page document in all of Canadian
1:41
finance the fun fact sheet Exactly the fun fact
1:44
sheet. So by the end of this conversation, you're
1:46
gonna know exactly how to evaluate any mutual
1:48
fund in under five minutes using the exact document
1:51
you are legally entitled to receive. It's a remarkable
1:54
shift in perspective from our last discussion,
1:56
really. Well, we're moving from the accounting
2:00
mathematics of how a fund is priced to the actual
2:03
behavioral and statutory reality of what that
2:06
fund is allowed to hold in its portfolio. We're
2:09
talking about the strict rules of the game now.
2:10
So let's start with those rules because, I mean,
2:12
if I give a manager $10 ,000 and tell them I
2:15
want a broadly diversified equity portfolio,
2:17
I want to know there's more than just a gentleman's
2:19
agreement keeping them from, you know, dumping
2:22
90 % of it into a single junior mining company.
2:25
Right. Just because they have a really good feeling
2:27
about it. Exactly. And that is exactly where
2:29
National Instrument 81 -102 or NI 81 -102 comes
2:33
in. I feel like my visual backdrop should instantly
2:36
change to a dense library of legal archives right
2:40
now. Complete with the dusty books and everything.
2:42
Yeah, exactly, because I am making serious notes
2:44
on this synthesis. NI -81 -102 is the foundational
2:47
rulebook for publicly offered mutual funds. It
2:50
dictates what a manager can and absolutely cannot
2:52
do. But let's pause there for a second. Why would
2:55
a highly paid professional manager even want
2:58
to do something crazy, like dump 40 % of the
3:01
fund into one stock? Aren't they supposed to
3:04
be the smart money? Well, think about how portfolio
3:08
managers are compensated and judged. They're
3:11
judged on performance, often against the benchmark.
3:14
So if a manager is trailing behind the market,
3:17
they might feel this immense pressure to take
3:19
a massive concentrated swing on a single stock.
3:23
just to catch up. Oh, wow. So they're just swinging
3:25
for the fences. Exactly. They are chasing what
3:28
the industry calls alpha or excess return. If
3:32
they're right, you know, they look like a genius
3:33
and attract way more money to the fund. But if
3:35
they're wrong? If they're wrong, they destroy
3:37
the wealth of everyday people. So they might
3:39
take a massive risk because the upside benefits
3:42
their career, but the downside totally ruins
3:44
your retirement. I mean, that is a terrifying
3:47
misalignment of incentives. It really is. So
3:50
how does the regulation actually stop that? through
3:52
hard concentration limits. A fund governed by
3:56
NI 81 -102 generally cannot put more than 10
4:01
% of its net assets into the securities of a
4:03
single issuer. Okay, so it caps it at 10%. Right.
4:07
It mathematically forces a level of diversification.
4:10
No matter how strongly a manager believes in,
4:12
like one tech stock or one bank, they hit a legal
4:16
wall at that 10 % mark. That makes a lot of sense.
4:18
You're being sold the concept of diversification,
4:21
so the regulation forces them to actually deliver
4:24
it. Exactly. What else is in this rule book?
4:26
Well, there are restrictions on taking what are
4:28
called control positions. Meaning what? So Mutual
4:31
Fund is designed to be a passive investor in
4:33
the companies it buys. It generally cannot buy
4:36
enough of a single company's voting stock to
4:39
exercise control over that company's management.
4:42
Ah, so they can't act like a corporate raider
4:44
from a 1980s Wall Street movie. Right, right.
4:47
Buying up a company just to fire the board of
4:49
directors and sell off the parts. Exactly. That
4:51
is a totally different, highly specialized and
4:54
highly risky type of investing. It has no business
4:57
inside a retail mutual fund. Makes sense. Then
5:00
moving down the list, we have strict limits on
5:03
borrowing. Now this one I want to dig into because
5:05
we've talked about margin and borrowing before.
5:08
Why would a mutual fund manager want to go into
5:11
debt? To leverage their bets. Okay, let's say
5:14
a fund has a hundred million dollars in investor
5:17
cash If they take that cash and buy stocks and
5:21
those stocks go up 10 % They made 10 million
5:24
dollars simple enough But what if they take your
5:26
head a million go to a bank and borrow another
5:28
hundred million? Oh boy Now they have 200 million
5:31
in the market if the market goes up 10 % They
5:34
just made 20 million dollars on your original
5:37
hundred million base They basically doubled your
5:39
return Which sounds fantastic, until you run
5:43
the math in reverse. Exactly. If the market dropped
5:45
20 % and they are leveraged like that, the losses
5:49
are amplified, plus they still owe interest to
5:52
the bank. I mean, it could turn a normal market
5:54
correction into a complete wipeout of the fund's
5:57
capital. Precisely. Mutual funds under NI -81
6:00
-102 are heavily restricted in their ability
6:03
to borrow money for investment purposes, precisely
6:06
to prevent that wipeout scenario. Good to know.
6:10
Furthermore, they face strict limits on holding
6:12
illiquid assets. OK, so define an illiquid asset
6:16
in this context, because obviously they aren't
6:18
buying real estate or art, right? Well, they
6:20
could be tempted to buy shares in private companies
6:22
or highly obscure debt instruments that just
6:25
don't trade on a public exchange. The problem
6:28
is a mutual fund makes a fundamental promise
6:31
to you. If you want your money back. You can
6:34
redeem your units and get cash within a couple
6:36
of days. Ah, I see the trap. So if I want my
6:39
$10 ,000 back on a Tuesday, but the manager has
6:42
locked up the funds money in a private startup
6:44
company that won't go public for five years,
6:46
they literally can't pay me. Exactly. To honor
6:49
that promise of daily liquidity, the rules severely
6:52
restrict them from holding assets they cannot
6:54
quickly sell on the open market. Right. OK. And
6:56
finally, there are highly specific rules around
6:59
how and when they can use derivatives. OK, derivatives.
7:04
That is one of those words that financial professionals
7:06
throw around that makes normal people's eyes
7:08
just glaze over. Oh, absolutely. Can you break
7:11
that down? Sure. Think of a derivative as a side
7:15
bet contract that derives its value from an actual
7:18
underlying asset. So instead of buying oil, you
7:21
buy a contract that pays you if the price of
7:24
oil goes up. Managers can use these for two reasons.
7:27
To speculate wildly. and place massive leverage
7:31
bets. or to hedge and protect the portfolio.
7:34
Like buying insurance. Yes. Exactly like buying
7:36
an insurance policy that pays out if, say, the
7:39
Canadian dollar suddenly drops in value. Right.
7:41
NI -81 -102 heavily regulates derivatives to
7:44
ensure managers are generally using them as that
7:47
insurance policy as a hedging tool rather than
7:50
using them to bypass the borrowing rules and
7:51
gamble. It's like bowling with the bumper lanes
7:53
up. The manager might not throw a perfect strike
7:55
for you, but the NI -81 -102 rules physically
7:58
prevent them from throwing a gutter ball. Meanwhile,
8:00
exempt funds are bowling without the bumpers.
8:02
If we connect this to the bigger picture, these
8:05
rules exist to make the diversification and safety
8:07
your promise legally enforceable rather than
8:10
just a discretionary choice by the manager. Right.
8:13
It's not just taking their word for it. Exactly.
8:15
Because when you step outside of this public
8:17
framework, say, into funds sold to wealthy or
8:21
institutional investors under exemptions in the
8:24
exempt market, those NI -81 -102 restrictions
8:28
just evaporate. Let's paint a picture of that
8:30
because I think a lot of people assume all investments
8:33
have the same basic safety nets. If I buy into
8:36
an exempt market fund, what am I actually risking?
8:39
You could be buying into a fund that takes 50
8:41
percent of your money and puts it into a single
8:43
unproven private mining company. Yikes. Yeah.
8:47
The fund could borrow millions of dollars to
8:49
lever up that bet. And if you suddenly lose your
8:52
job and need your money back, the fund manager
8:54
can legally just say, no, your capital is locked
8:56
up for the next seven years. That is a staggering
8:59
difference. I mean, exempt funds aren't inherently
9:01
evil, but the risk profile is completely unshielded
9:04
compared to a retail mutual fund. Completely
9:07
unshielded. But here's the challenge regulators
9:10
faced. It's one thing to write a dense rule book
9:13
that governs the fund managers. It's entirely
9:15
another thing to prove to everyday investors
9:18
what kind of fund they're actually buying before
9:20
they hand over their life savings. Right. It's
9:23
ironic that all these complex rules are meant
9:24
to protect you, but historically, the industry
9:28
communicated that protection by handing you a
9:30
hundred -page prospectus filled with legal jargon.
9:34
It's basically a doorstop. You don't read it.
9:36
I don't read it. Literally nobody reads it. So
9:39
the regulators forced the industry to completely
9:42
change its communication strategy. They mandated
9:44
the creation of the Sun Facts document or the
9:47
ETF facts if we're talking about exchange traded
9:48
funds. Right. They forced the industry to distill
9:51
the most vital critical information down to just
9:54
two pages using plain language. And it's not
9:56
just a nice marketing summary. It is a legally
9:59
required document. Yes. And receiving it. triggers
10:03
a very specific legal mechanism called the statutory
10:06
right of rescission. Let's clarify rescission.
10:09
That isn't just a casual return policy, is it?
10:11
No, rescission literally means unwinding the
10:14
clock. Depending on your province, when you receive
10:17
this document, you have a stripped legal window,
10:20
usually about two business days, where you can
10:22
change your mind, tear up the contract and get
10:25
your money back. Wow. Yeah. And if there is a
10:27
misrepresentation in the document, that window
10:30
can extend significantly. Your right to back
10:33
out of the deal is tied directly to this two
10:36
-page piece of paper. So let's look at page one
10:39
of this ultimate cheat sheet. It starts with
10:41
the basics, right? The size of the fund, the
10:43
date it launched, and who the portfolio manager
10:45
is. Yep. But then it gets right to the core of
10:47
the issue. What does this fund actually invest
10:51
in. It shows you the broad investment mix, but
10:53
more importantly it prints the top 10 exact holdings.
10:56
And this is where the document invites you to
10:58
do a little detective work. By looking at those
11:00
top 10 holdings and the percentages they represent,
11:04
you can spot something insidious called closet
11:06
indexing. I love catching funds doing this. Let's
11:09
explain what closet indexing actually is. Let's
11:12
say you want to invest in the Canadian market.
11:14
So you look at the Standard Benchmark, the TSX
11:16
index. The TSX is the Toronto Stock Exchange
11:19
Composite Index. It's basically the default thermometer
11:22
for the Canadian stock market. The biggest companies
11:25
in that index are the major banks, the big railways,
11:29
and the energy pipelines. Correct. And you can
11:31
buy a basic computerized ETF that tracks that
11:34
exact index for almost zero cost, a fraction
11:38
of a percent in fees. But then a mutual fund
11:40
manager comes along and says, gave me a premium
11:43
fee of 2 % a year, and I will actively manage
11:45
your money to try and beat the market. Sounds
11:47
tempting. Right. But the manager is terrified
11:50
of underperforming because if they try something
11:52
different and fail, they get fired. So what do
11:55
they do? They take your money, charge you the
11:57
high fee, and just buy the exact same banks and
12:00
pipelines in the exact same order as the cheap
12:03
index. They hide in the closet of the index.
12:05
Exactly. You're paying luxury prices for a generic
12:08
product. If you pull up the fun facts for a so
12:11
-called active Canadian equity fund and the top
12:14
10 holdings are identical to the top 10 holdings
12:17
of the TSX, you've just diagnosed closet indexing
12:20
at 30 seconds. It is a brilliant way to force
12:23
transparency. But page one doesn't stop at holdings.
12:26
It also details the fund's historical performance.
12:30
Here's where it gets really interesting. Page
12:32
one shows you the year -by -year returns, but
12:35
it also prominently features a standardized low
12:37
to high risk rating and a distinct metric called
12:41
the worst three -month return. But, wait. The
12:45
sources explicitly say that past performance
12:47
has weak predictive power and is one of the least
12:50
useful things on the page. So why should you
12:53
fixate on the worst three -month return? What's
12:55
fascinating here is that the worst three -month
12:57
return is not attempting to be a prediction of
13:00
the future. It is a behavioral test. A behavioral
13:03
test? Yeah. Think about the standard risk rating
13:05
slider on that page, the one that casually says
13:08
low to medium or high. That rating is based purely
13:11
on a mathematical formula of historical volatility
13:13
over the last 10 years. Which means if the market
13:15
has been artificially calm for a decade, a risky
13:18
fund might mathematically look like it has low
13:20
volatility, giving you a completely false sense
13:22
of security right up until an economic crisis
13:25
hits. Exactly. It's backward looking math. But
13:27
the worst three -month return stops being abstract.
13:31
It tells you exactly what this fund did to real
13:34
human beings at its absolute lowest point, like
13:36
during the 2008 financial crisis or the 2020
13:39
pandemic crash. It gives you a stark percentage
13:43
drop. It forces you to look at that sudden brutal
13:46
decline and ask yourself, if this happens to
13:49
my retirement account tomorrow, would I panic
13:51
and sell everything? That is such a crucial distinction.
13:55
We all take these risk -collarence questionnaires
13:57
when we open an account, and they ask these polite
14:00
hypothetical questions like, if your portfolio
14:02
drops 20%, do you buy more, hold, or sell? And
14:05
everyone clicks buy more. Right. Everyone sitting
14:07
in a comfortable office sipping coffee clicks
14:09
buy more because they think they have the iron
14:11
discipline of Warren Buffett. But the reality
14:13
of logging into your account and seeing that
14:15
your life savings has plummeted by a quarter
14:17
in just 90 days is an entirely different. It
14:20
induces physical panic. If a fund's worst three
14:23
-onth return is 25 percent, and you know deep
14:26
down that a drop like that would cause you to
14:29
liquidate your account in terror to stop the
14:31
bleeding, then that fund exceeds your true emotional
14:35
risk capacity, regardless of what the neat little
14:37
medium risk slider says it anchors your expectations
14:40
to the worst case reality instead of optimistic
14:43
hypotheticals exactly okay so page one handles
14:45
the emotional cost of a sudden market drop making
14:48
sure you don't panic but the irony is that while
14:51
page one stops you from losing money in a sudden
14:54
crash page two reveals the slow silent way you're
14:57
guaranteed to lose money every single day let's
14:59
turn the page to costs page two is arguably the
15:02
most vital piece of real estate in financial
15:04
disclosure It strips away all the marketing laws
15:07
and breaks down exactly what you're paying both
15:09
to get into the fund, to hold the fund, and to
15:11
get out. Right. Let's start with the ongoing
15:13
fund expenses, which are broken into two main
15:16
parts. Yeah. The management expense ratio, or
15:18
MER, and the trading expense ratio, or TER. OK.
15:22
I want to make sure I have this straight. The
15:24
MER is the big umbrella fee, right? Yes. That's
15:26
the annual percentage deducted directly from
15:29
the fund's assets to pay for the portfolio manager's
15:31
salary, the administrative costs, and taxes.
15:34
And the fund charges this fee whether they make
15:37
me money or lose me money that year. That is
15:40
correct. The emir is your structural overhead.
15:43
But the tior, the trading expense ratio, sits
15:46
on top of that. Think of it this way. Every time
15:49
the manager buys or sells a stock inside the
15:52
portfolio, the fund pays a brokerage commission.
15:56
The tior represents the cost of all that internal
15:58
buying and selling. Ah. If a manager trades frantically
16:01
trying to time the market, the TOR goes up, dragging
16:04
down your return. So I'm paying for the manager's
16:06
salary and I'm paying for their trading habits.
16:09
What else am I paying for? Right. Page two also
16:11
explicitly breaks down something called trailing
16:13
commissions. Oh, boy. This is a crucial area
16:16
of disclosure. It explains exactly what portion
16:18
of the management fee is being continuously carved
16:21
out and paid by the fund company back to the
16:24
dealership whose advisor sold you the fund in
16:26
the first place. Hold on, let me put myself in
16:28
the shoes of a frustrated investor for a second.
16:30
Go for it. Are you telling me that if I bought
16:33
a mutual fund from an advisor five years ago,
16:36
and I haven't spoken to that advisor since, they
16:38
haven't called me. They haven't given me any
16:39
new advice. They are still taking a cut of my
16:43
money every single month just because I continue
16:45
to hold this fund. Yes. The trailing commission
16:48
is designed to compensate the advisor for ongoing
16:51
advice and service. But as you just pointed out.
16:54
It gets paid whether you actually receive that
16:57
ongoing advice or not. Wow. The Fun Facts document
17:00
brings this structural conflict of interest right
17:03
out into the daylight. It forces the industry
17:06
to admit, in print, that they are getting a continuous
17:09
slice of your pie. That should make anyone's
17:11
blood boil. But the regulators did something
17:14
even smarter on page 2 to really drive that point
17:16
home. They didn't just print a bunch of percentages
17:18
and expect normal people to do the complex compounding
17:21
math in their heads. They mandated that the fees
17:24
must be shown in actual dollars on a hypothetical
17:26
$1 ,000 investment over 1, 3, 5, and 10 years.
17:30
It is the single most crucial design choice by
17:32
the regulators because they understood behavioral
17:34
psychology. There is a deeply ingrained cognitive
17:38
blind spot in the human brain. Percentages do
17:42
not feel like real money to us. If I tell you
17:45
a fee is 2%, it sounds utterly negligible. It
17:48
sounds like a rounding error at the grocery store.
17:51
Yeah, 2 % sounds like the discount I get for
17:53
paying my property taxes a month early. It feels
17:55
like nothing. But money compounds, and so do
17:59
fees. By forcing the document to show that cumulative
18:04
drain in dollars over a decade, it shatters that
18:07
cognitive blind spot. Seeing the actual dollars
18:10
makes a huge difference. When you see that a
18:12
seemingly tiny percentage is going to eat hundreds
18:14
of dollars out of a simple thousand dollar investment
18:17
over 10 years, the scale of the friction becomes
18:20
impossible to ignore. Imagine scaling that up
18:23
to a hundred thousand dollar retirement account.
18:25
You're talking about bleeding tens of thousands
18:27
of dollars in fees. Exactly. It totally changes
18:30
the conversation you have with your advisor.
18:32
You stop asking, is a 2 % fee normal for the
18:35
industry? And you start asking, am I actually
18:37
receiving $20 ,000 worth of value and advice
18:40
from you for holding this product? Exactly. It
18:42
forces a value proposition conversation. And
18:44
I should note, for the investors who really want
18:47
to dig deep, the ones who want the legal mechanics
18:50
of the derivative strategies or the deep dive
18:52
into the corporate structure, the full simplified
18:56
prospectus still exists. Oh, the doorstop is
18:59
still there? It sits right behind the Fun Facts
19:00
document, yeah. So if I want to punish myself
19:03
with a hundred pages of legalese, where do I
19:06
actually find that prospectus? You can always
19:08
request it directly from the fund company. But
19:10
the easiest way is to pull it up for free on
19:12
Cedar Plus Miami. Think of Cedar Plus as a giant
19:16
public digital filing cabinet run by Canadian
19:19
securities regulators. Right. Every public company
19:21
mutual fund has to file their official legal
19:23
documents there. So what does this all mean?
19:25
It means that using this one brilliantly designed
19:29
document, this legally required standardized
19:31
two page summary, you can execute three incredibly
19:35
powerful checks in under five minutes before
19:37
you buy any fund. Just three checks. Check one,
19:40
flip straight to page two and look at the fees
19:43
and actual dollars over 10 years to see what
19:46
this relationship is really going to cost your
19:48
future self. crucial. Check two, go back to page
19:51
one and stare at the worst three month return
19:54
to see if your stomach can actually handle the
19:56
historical reality of this fund crashing. And
19:58
check three, compare the top ten holdings on
20:01
page one to the broader market index to make
20:04
sure you aren't paying high active fees for a
20:06
lazy closet index portfolio. It is a remarkable
20:10
empowering toolkit. The regulators took decades
20:13
of hard lessons in behavioral finance, market
20:15
crashes and legal protections and synthesized
20:18
them. into the absolute best, most rigorously
20:20
tested two -page document in Canadian finance.
20:24
But this raises an important question. I have
20:27
a feeling I know where this is going. We built
20:28
a beautiful system, but human nature is getting
20:30
in the way. Despite all this brilliant engineering,
20:33
all the plain language testing, the bold headings,
20:35
and translating abstract percentages into painful
20:38
dollar figures, readership of the Fun Facts document
20:41
remains incredibly low. Ugh, really? Most investors
20:44
simply file it away in a drawer or click accept
20:47
on a screen. without ever actually glancing at
20:49
it. It's the ultimate flaw in the whole regulatory
20:51
philosophy. You can build the absolute perfect
20:54
warning label for a hazardous product, but you
20:57
literally cannot force someone to read it. Which
21:00
brings us to a rather profound realization about
21:03
the limits of this entire system. Well, let's
21:05
recap this deep dive first before we hit that
21:07
final thought, because we've covered massive
21:09
ground today. We started by mapping out the invisible
21:12
guardrails of National Instrument 81 -102, the
21:16
stripped legal boundaries that prevent your retail
21:18
mutual funds from taking concentrated, heavily
21:20
leveraged or illiquid bets with your life savings,
21:24
unlike the Wild West of the exempt market. Right.
21:27
We then explored the sheer diagnostic power of
21:30
the Fun Facts document, discovering how the worst
21:32
three -month return serves as a brutal but absolutely
21:35
necessary test of your actual psychological risk
21:37
capacity. And finally, we confronted the harsh
21:40
reality of turning the page to see the long -term
21:43
drag of fund fees presented not as harmless percentages,
21:46
but in actual hard dollars. It's a comprehensive
21:48
system designed from the ground up to protect
21:51
the investor. But going back to that low readership
21:54
issue, it leaves us with a final thought -provoking
21:57
idea that really builds on the recent industry
22:00
push for what they call client -focused reforms.
22:04
OK, what is it? If humans are psychologically
22:06
hardwired to ignore even the most perfectly engineered
22:09
plain language two -page warning labels is the
22:13
era of relying on disclosure ending. Oh, wow.
22:16
That is a massive paradigm shift. You're saying
22:18
the paperwork might not be enough anymore. For
22:20
decades, the entire regulatory philosophy was
22:22
based on disclosure. buyer beware as long as
22:26
we give the buyer the facts. Right. But if we
22:28
have empirical proof that the buyer simply will
22:31
not read the facts, perhaps the future of investor
22:33
protection won't be about giving you better reading
22:35
material at all. Then what is it? Perhaps the
22:38
future is a system that legally forces the financial
22:40
industry to adopt a true fiduciary standard,
22:44
meaning They can only sell you what is objectively,
22:47
demonstrably in your best interest, eliminating
22:50
the buyer beware element entirely. That makes
22:52
a lot of sense. We are starting to see the edges
22:54
of the shift now. Moving from an industry that
22:58
just hands you a document disclosing a conflict
23:00
of interest to a regulatory environment actively
23:04
demanding that the conflict be resolved in the
23:06
client's favor. That would change the entire
23:08
foundation of how financial products are sold.
23:10
We go from, here is a beautifully designed two
23:14
-page pamphlet explaining exactly how this high
23:16
fee might hurt you to, we literally cannot legally
23:20
sell this to you unless it actually helps you.
23:23
Exactly. Well, thank you for joining us on this
23:24
deep dive. Keep exploring. Keep questioning the
23:27
professionals who manage your money. And always
23:30
remember to check the exact rules of where your
23:32
money lives. Because at the end of the day, you
23:34
want to make sure your investments are bowling
23:36
with the bumpers up.