Brokers are supposed to recommend investments that are in the best interests of their clients.
But a new study from University of Toronto professor Susan Christoffersen sheds light on which is more important to a broker: the performance of the fund or the fee it pays the broker?
The study, published in the February 2013 issue of the Journal of Finance, found that mutual funds offering higher broker fees attract the most investments, especially when the broker is not affiliated with the mutual fund company.