Time to kill trailer commissions? + MORE Sep 4th

MILAN – Italian carmaker Fiat, which controls Chrysler, will go ahead with investments in its flagship Mirafiori plant in Turin, where it will produce Maserati SUVs.
Fiat confirmed the decision Wednesday, after signing a contract with unions and a day after it cast doubt on future investments because of a constitutional court ruling that essentially forced it to include a maverick union that had refused to approve flexible work rules.
UILM regional union leader Maurizio Peverati said the investment sum and plans will be discussed in coming days.
Mirafiori’s 5,400 workers have been mostly on layoff schemes for the last two years. The investment will convert the plant to build a Maserati SUV and another model to be announced. Production of the Maserati is to begin next year for release in 2015.
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As many of you know, in the process of building myself a solid and diversified income source to become financially independent, I have looked at many different options. Clearly, my dividend income strategy will end up representing the core of that income over but I’ve also considered options such as real estate. Then, yesterday while reading the economist, I came across this chart:

I do already own real estate in both Canada and the US but since I’m much more familiar and closer to Canadian markets, I’d be more likely to invest there. Those numbers look very scary for Canada don’t they? It’s hard to argue that prices should move in similar ways to rent and income? Canadian Real Estate looks very overpriced. It’s even worse when you consider how much debt Canadians have.
Of course, Japan seems extremely cheap based on those metrics but I’d hesitate very much to invest in Japan real estate these days.
I’m not sure what I’ll do. It’s difficult to wait for a bubble to “pop” but in a case like this, buying just before a crash would end up being a very poor use of my money…

The debate over whether Canada should ban trailer fees, the hidden commissions that advisers receive when they sell their clients mutual funds, is intensifying. Since the U.K. stopped the practice in January, the Canadian Securities Administrators have been aggressively pushing for similar reforms here. The long-standing argument against trailers, which cost retail investors about 1% of their returns every year, is that advisers may be more motivated to sell funds that pay them the highest commissions rather than investments more appropriate for client portfolios.
But supporters of trailers point to the 20% of U.K. advisers who exited the field after the ban, saying it left many investors without financial advice. Don Reed, CEO of mutual fund company Franklin Templeton, believes the same would happen here. “Advisers will leave and do something else,” he says. However, Vanguard Canada CEO Atul Tiwari says the U.K.’s new, more stringent adviser qualifications explain the drop. Moreover, Tiwari adds, it’s not such a bad thing if clients with small portfolios don’t work with planners: They can meet their needs using the increased number of platforms that offer low-cost funds to self-directed investors…