Finance

Impacts of Product Knowledge Reforms

The Financial Markets Authority (AMF), he continues, is changing the rules of the game.

Guy Mineault is familiar with the world of investment funds. Author of the book Make your investments more successful without suffering them: for the investor who wants to make his investments more successful and for the adviser who wants to serve him better (Éditions Sapiens, 2010), he chairs the MIDIF, an organization whose mission is “to inform about investment and heritage protection. »

Guy Mineault’s notoriety stems mainly from his role as founding president of Kolortrak, an analysis and evaluation software for mutual funds and ETFs intended for advisors.

According to Guy Mineault, the principle of knowledge of the product covers the following elements.

“Relevant” clues

The AMF will require benchmarks to be “relevant to the client,” says Guy Mineault.

It turns out, he explains, that fund manufacturers and their marketing experts have created a host of indices from data that is exclusive to them. “We don’t know what’s there. Even the advisers do not find themselves there! “says Guy Mineault.

Instead, fund manufacturers should use indices that provide “fair” comparisons and can be “explained to the client”.

Guy Mineault believes that these are mainly major indices such as the S&P 500, the S&P/TSX and the MSCI EAFE. “Several clues will no longer hold water,” he said.

The webinar host went one better. ” It was time ! We have already seen funds being compared to GICs. As an advisor, you have to be alert because you don’t want to be the subject of complaints,” says Marc-Étienne Salvail, director at SCiO.

Guy Mineault also addressed the Morningstar rating systems with their famous five stars. “This classification is unstable. Manufacturers will no longer be able to refer to it,” he points out.

Recommendation based on “behaviors”

According to Guy Mineault, the AMF expects advisers to eventually be able to justify their recommendations based on the funds’ alleged “behaviors” during cycles, such as a recession, a series of interest rate hikes , a stock market correction, etc.

The webinar speaker also dwelt on Fund Fact Sheets. “You have to be careful because the target allocations can change. Managers are active,” he says.

The rest of the webinar focused on various functions of the Kolortrak software. What looked like a demo was met with disapproval from several webinar registrants, as they weren’t expecting it.

Funded by general agent IDC Worldsource, SCiO Training broadcasts webinars throughout the year.

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