One of America’s biggest financial advisers Ric Edelman wants investors to sell their mutual funds and invest in exchange traded funds (ETFs) instead. On the surface, it’s easy to see why:

  • ETFs are transparent, so you know what’s in them and how they’re doing at all times.
  • Liquidity is higher than in a mutual fund.
  • Expenses are lower for ETFs because they track an index.
  • They’re tax-efficient, incurring little or no capital gains taxes.

Paul B. Farrell for reports that for more than two decades, Edelman’s firm had built their reputation and credibility as reliable financial advisers who supported mutual funds. This has since changed because over the years, the goal has shifted from the industry caring for the shareholders to serving themselves for profit at the expense of those invested. So, what if everyone moved their life savings out of mutual funds and put it into ETFs? Would the industry care more about the well-being of those invested?

There is something smelly going on if one of the leading financial advisers is telling the general public to sell their portion of the $10 trillion mutual fund industry and put it somewhere, anywhere, else.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.