Depository Institutions & Mutual Funds WSJ Article Review
In a recent article entitled Advisers Face Barrage of Mutual-Fund Pitchmen, which was published by The Wall Street Journal on March 5th, 2013, financial reporter Corrie Driebusch describes the growing diversity in mutual fund varietals being offered by wealth management firms, as well as the deluge of telephone calls being used by mutual fund wholesalers to court potential brokers. The purpose of the article is to inform readers about this increasingly prevalent distraction faced by wealth managers and financial advisers, who are now forced to deal with dozens, if not hundreds, of solicitations on a daily basis from mutual fund wholesalers hoping to peddle the potential of a profitable fund investment. According to Driebusch, "as the largest wealth-management firms have embraced the widening range of mutual-fund offerings, from products by the traditional heavyweight fund families to newer niche strategies, brokers have more choices for their clients & #8230; but with more choice comes more salespeople knocking on doors and calling brokerage offices, shilling their newest offerings" (2013). This alarming trend is the result of a diversification of the mutual fund market as a whole, with new ratings systems allowing wholesalers to customize fund offerings to the needs of individual clients. Driebusch also quotes Evan Whittle, who works as a branch manager for Raymond James & Associates in St. Petersburg, Florida, to support her overall assertion that the ability of financial advisers to conduct their work is being compromised by the intrusive practices of mutual fund wholesalers. As Whittle describes the situation in his interview with Driebusch, "ten years ago we didn't have ratings on nonrestricted international bond funds because they didn't exist in that name or they were not a recognized investment strategy" (2013), and because of the abundance of new mutual fund ratings and classifications, wholesalers are working proactively to secure their share of this lucrative market.
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