Former Brokers Say JPMorgan Favored Selling Bank’s Own Funds Over Others

After all the negative publicity these bannks and financial services firms have received over the last ficve years. Why does the public continuously look to them for conflict free advice? If these institutions do not agree, in writing, to be a true fiduciary to you,

NEW YORK, NY - MAY 14:  Flowers stand in front...
NEW YORK, NY - MAY 14: Flowers stand in front of a Chase sign at a bank branch inside the JPMorgan Chase headquarters on May 14, 2012 in New York City. Following a $2 billion trading blunder, JPMorgan Chase's chief investment officer Ina Drew retired and will be succeeded by Matt Zames, an executive from JPMorgan's investment bank. At least two others are also being held accountable for the mistake. (Image credit: Getty Images via @daylife)

run do ont walk away from them.

These financial advisers say they were encouraged, at times, to favor JPMorgan’s own products even when competitors had better-performing or cheaper options. With one crucial offering, the bank exaggerated the returns of what it was selling in marketing materials, according to JPMorgan documents reviewed by The New York Times.

The benefit to JPMorgan is clear. The more money investors plow into the bank’s funds, the more fees it collects for managing them. The aggressive sales push has allowed JPMorgan to buck an industry trend. Amid the market volatility, ordinary investors are leaving stock funds in droves.

Brokers at banks are under tremendous pressure to meet their sales quotas. Enough said.

Please comment or call to discuss how this affects You.

Posted via email from Curated 401k Plan Content

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Mutual Funds Trailing Stock Market By Most Since 1998

CHICAGO, IL - MARCH 17:  Pedestrians walk past...
Image by Getty Images via @daylife
Picking fund managers based on past performance will invariably result in poor performance. There is no evidence of any correlation between past performance and future results. To reach your long term goals you should own a globally diversified portfolio with low cost funds.

(Bloomberg News) Stock mutual fundsare having their worst year since 1998 relative to their benchmarks, as higher volatility makes it harder to pick stocks, according to JPMorgan Chase & Co.Among 2,806 funds tracked by the brokerage, 47 percent underperformed their benchmarks by more than 2.5 percentage points this year, the most since the 55 percent recorded in 1998. Only 13 percent of the funds beat the market by the same margin. The underperformance accelerated last month, with the proportion of trailing funds almost doubling from July, according to JPMorgan data.U.S. stock price swings widened at the fastest rate since the 1987 crash in the month through Aug. 23 as investors weighed stalling economic growth against the prospect of additional stimulus from the Federal Reserve. The volatility helped drive August options volume to a record 550.1 million contracts on demand for a hedge against equity losses, according to the Chicago-based Options Industry Council.

“The turbulence of markets in August caused a rapid deterioration of active manager performance,” Thomas J. Lee, JPMorgan’s chief U.S. equity strategist, wrote in the report dated Sept. 1.

This is further evidence that trying to find superior performance or managers is futile and will result in disappointing performance. When you consider the additional costs of active management and the under performance this is a waste of time.

Please comment or call to discuss how this affects you and your long term goals.

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