John De Goey

Your Business

Picking apart the idea of a stock-picker’s market

Evidence doesn’t support active management, so why do some advisors?

By John De Goey |October 2, 2023

Your Business

Addressing advisors’ misguided beliefs

Opinion: Here are three ideas to promote evidence-based practices

By John De Goey |September 19, 2023

Planning and Advice

Meet the Denialists

I’d like you to meet a fictional couple named Jim and Betty Denialist, two advisors with Reasonable Financial Services. Jim and Betty insist they are responsible advisors who help their clients make smart choices with their money and until recently, had always encouraged their clients to invest 100% of their money in mutual funds.

By John De Goey |October 24, 2011

Planning and Advice

The professional way to get paid

Let’s face it, the ongoing discussion about the relative merits of differing compensation models is one of the defining issues of our generation for our industry. The four basic options include: by salary, by the hour, by assets and by commission. There’s obviously room to mix and match and to use hybrid models, as well. Any conversation about this topic requires the requisite disclaimer of ‘it’s a free country’ and ‘you can use any compensation model you want’, of course.

By John De Goey |September 15, 2011

Planning and Advice

Tilting the three factor model

Many advisors who use Dimensional Fund Advisors (DFA) often struggle in explaining how DFA products differ from various other products investors might choose. One might say DFA’s approach is essentially passive but does not use conventional cap-weighted indexes like Barclay’s or Vanguard.

By John De Goey |August 19, 2011

Planning and Advice

Selective disclosure

Although the evidence is far from conclusive or unanimous, there are many experts who believe markets are highly efficient and certainly efficient enough that it does not make sense to try to exploit whatever mispricings might still exist. For them, fundamental and technical analysis, market timing and similar methods seem nearly useless. Although it is […]

By John De Goey |January 19, 2010

Industry

Motives behind product advice

In the ongoing debate between the good and bad of competing product lines, there are often some interesting reasons given for the product recommendations. Take the use of actively managed and passively managed products, for instance. The variations on active management are nearly endless. Meanwhile, there are three distinct paradigms for passive management: the Fama/ […]

By John De Goey |October 30, 2009

Planning and Advice

An opportunity for stock pickers?

Recently, I came across a marketing pitch that described the current equity environment as being full of opportunity for good stock pickers. This is not the first time I have heard this claim, nor do I suspect it will be the last. Perhaps the people making the claim even believe it to be true. The […]

By John De Goey |October 23, 2009

Industry

Opinion: HST to push mutual funds off the shelf

There is nothing funny about even higher mutual fund MERs, but MERs are sure to rise next summer. The Harmonized Sales Tax (HST) slated to come into effect in July 2010 in Ontario (where the lion’s share of IFIC member firms are located) will be the cause. I confess that I find the comments from […]

By John De Goey |August 13, 2009

Planning and Advice

No knockout punch

There’s this little intellectual quirk of logic that seems to bedevil many people who give serious thought to the relative merits of both active and passive approaches to investment management. As has been noted previously, both sides have some degree of validity and neither side has (to date, at least) managed to score a “knockout […]

By John De Goey |February 1, 2009

Planning and Advice

We’re like Egyptians

While reading Thomas Homer- Dixon’s fascinating and terrifying book The Upside of Down recently, I came across an assessment of his that struck me as an insightful comment on human nature. He was commenting on the concept of denial. According to Homer-Dixon, people who succumb to denial go through three psychological phases. The first he […]

By John De Goey |January 1, 2009

Planning and Advice

SPIVA Las Vegas

The debate between the relative merits of active and passive strategies has waged for some time now. Often, it is waged with journalists and academics taking the passive side and advisors taking the active side. Now, as pretty much everyone knows, neither side has been able to score an unchallenged victory. Given that this is […]

By John De Goey |December 12, 2008

Planning and Advice

Whither materiality?

The question of meaningful, professional disclosure can be addressed in a number of ways. The most obvious way is to comply with the letter of the regulation. As such, product manufacturers need to make clear disclosures in their prospectuses and offering memoranda, inlcuding what their products cost and any associated permutations, such as taxes, performance […]

By John De Goey |December 1, 2008

Planning and Advice

Corporate bafflegab

If the 1960s were the decade when big tobacco had to come to terms with the mountains of scientific evidence that their products are addictive and carcinogenic and this is the decade when big oil has to come to terms with the mountains of evidence that CO2 emissions contribute to climate change, when will big […]

By John De Goey |October 1, 2008

Planning and Advice

Setting the standard

According to IIROC’s most recent proposal regarding financial planning standards, member firms will soon be expected to check whether or not representatives who provide financial plans have completed a single course on financial planning from the CSI or have qualified for one of various financial planning designations. A resulting fear is that, if approved, member […]

By John De Goey |September 1, 2008

Planning and Advice

Fee query protocol

Stephen Covey, the author of Seven Habits of Highly Successful People, has made a good part of his reputation by getting people to focus on things that are genuinely important rather than those that are merely urgent. As advisors, we play a similar role in helping our clients make sense of competing products and strategies. […]

By John De Goey |August 1, 2008

Planning and Advice

Disclose material facts

(March 2008) How exactly might a person define the word “material” — as in: “Professional Advisors must always disclose all material facts when making product and strategy recommendations to clients?” The dictionary suggests synonyms like relevant, substantial and pertinent could all be used in place of the word “material.” To my mind, any piece of […]

By John De Goey |February 29, 2008

Planning and Advice

A novel approach

(February 2008) In an attempt to gain (or at least retain) market share, some mutual fund companies have taken to increasing the trailing commissions paid to advisors once DSC schedules near expiration. The idea is that since MERs are unchanging, why not pay out higher amounts to advisors once the high cost of the up-front […]

By John De Goey |February 22, 2008

Planning and Advice

Finding the right firm

(June 2006) Are you truly happy in your job? Does your current position offer you everything you thought it would, or is there something missing? For those who don’t want to be corporate lifers in a single company, it’s important to find a fit with a firm that suits both their ambitions and skill set. […]

By John De Goey |June 6, 2006