Fund managers turned advisers may be good for investors Dollars & Sense Peter Watson Guest Contributor 25 | Thursday, October 9, 2014 | OAKVILLE BEAVER | www.insideHALTON.com fee issue is a topic that should and will be discussed. Fees as a percentage of the return on investment are high. Investment management fees will decline and these management rms' pro ts will shrink. The nancial pressure will see the consolidation of investment rms and the reduction of excess staff including money managers. There will be a surplus of unemployed exinvestment managers. The question is what will they do? And this is where it becomes interesting. see A strong on p.26 I nvestors should re-evaluate their use of mutual fund managers who actively manage their portfolios. One industry expert says the days of stock picking are over. This was reported in the Aug. 22 issue of the Wall Street Journal in an article titled The Decline and Fall of Fund Managers. This is the opinion of Charles Ellis who is referred to as the dean of the investment-management industry. Ellis, who founded a nancial consulting rm, is the author of 16 books and is the former chair of Yale University's investment committee. Ellis said, "with rare exceptions, active management is no longer able to earn its keep." Decline in use of active managers One of the reasons for the decline in the use of active managers is their reduced strength at what they have done in the past. This has been made possible because of access to strong analytical tools, electronic trading and instant access to news. The market is more ef cient and the outperformance of active managers has assured their demise. It is virtually impossible for a manager to add value by beating the market. The easy days are gone. And the competition is too erce. If thousands of managers are looking for bargains, then all of those bargains will be taken. There is not enough to go around. So, in a world where active managers do not add value, what happens next? Topic of fees Now, the fee conversation will heat up. If an active manager cannot beat the market, they can therefore no longer justify their high fees. Fees have historically not been as big an issue. The client was not as concerned with investment fees in past days of better investment returns. Now, in a world of lower in ation that has lower expected returns, the ONTARIO ENERGY BOARD NOTICE TO CUSTOMERS OF UNION GAS LIMITED Union Gas Limited has applied to raise its natural gas rates effective January 1, 2015 Learn more. Have your say. Union Gas Limited has applied to the Ontario Energy Board to increase its natural gas rates effective January 1, 2015. Under the proposal, an average residential customer of Union Gas in Southern Ontario (from Windsor to Hamilton) would see an increase ranging from $2 to $3 to the annual bill. Residential customers in all the other areas served by Union Gas would see an increase ranging from $3 to $5 to their average annual bill. Other customers, including businesses, may also be affected. The requested rate increase is set using a formula previously approved by the Board for the period 2014-2018. The formula is tied to inflation and other factors intended to promote efficiency. THE ONTARIO ENERGY BOARD WILL HOLD A PUBLIC HEARING The Ontario Energy Board (OEB) will hold a public hearing to consider Union Gas' request. We will question the company on its case for a rate change. We will also hear arguments from individuals and from groups that represent Union Gas customers. At the end of this hearing, the OEB will decide what, if any, rate changes will be allowed. The OEB is an independent and impartial public agency. We make decisions that serve the public interest. Our goal is to promote a financially viable and efficient energy sector that provides you with reliable energy services at a reasonable cost. BE INFORMED AND HAVE YOUR SAY You have the right to information regarding this application and to be involved in the process. You can: · review Union Gas Limited's application on the OEB's website now. · file a letter with your comments, which will be considered during the hearing. · become an active participant (called an intervenor). Apply by October 20, 2014 or the hearing will go ahead without you and you will not receive any further notice of the proceeding. · at the end of the process, review the OEB's decision and its reasons on our website. LEARN MORE Our file number for this case is EB-2014-0271. To learn more about this hearing, find instructions on how to file letters or become an intervenor, or to access any document related to this case please enter that file number at the OEB website: www.ontarioenergyboard.ca/notice. You can also phone our Consumer Relations Centre at 1-877-632-2727 with any questions. ORAL VS. WRITTEN HEARINGS There are two types of OEB hearings oral and written. The OEB will determine at a later date whether to proceed by way of a written or oral hearing. PRIVACY If you write a letter of comment, your name and the content of your letter will be put on the public record and the OEB website. However, your personal telephone number, home address and email address will be removed. If you are a business, all your information will remain public. If you apply to become an intervenor, all information will be public. This rate hearing will be held under section 36 of the Ontario Energy Board Act, S.O. 1998 c.15 (Schedule B). Ontario Energy Board Commission de l'énergie de l'Ontario