Dear S. Disturber, (aka, @Old_Joe )
Could be either or both, depending upon how well the advisors surveyed actually performed for their customer base; as the Natixis whitepaper is apparently directed at a captive crowd of company connected advisors.
I did read that "alternative investments" seem to be on the "next or current" hot plate of places for money to travel; if the client is in the $1-4 million dollar portfolio arena.
If and when an investment advisor can provide a true document to me of how they performed for portfolio type "x", over the past 10, 5 and 1year time frames, that would have been or is suitable for me today, I'll listen.
The most simple baseline would be to compare against the inexpensive VWINX.
Below in bold, from the 2015 whitepaper linked prior:
Investment Pragmatist: More than three-quarters of advisors believe that a
traditional stock and bond portfolio is no longer enough to effectively manage
risk and pursue returns. Fortunately, continual innovation has provided access
to new asset classes, new pricing structure and new portfolio tools, allowing
advisors to make practical decisions about which tool will best fit client goals
and investment objectives.
I wish these folks (advisors and clients) well with the alternative path.
The below fund link at about 40/60, equity/bond over the long term. Pick your own equity/bond mix, a built your own, eh? My own caution note for such a mix is that some bond types may blow up at any time, and I would always advise to be observant. 'Course, folks here are always paying attention, yes? And don't forget that the death of the 30+ year bond market bull continues to be issued by someone, somewhere; one would suspect. I recall its imminent death announcement here several years ago (the thread exists somewhere, eh?), but I don't have time for search; although I recall Mr. Snowball was involved in the discussion).
VWINX performance
VWINX composition
Lastly, I have had several pre-Halloween treats today; in order to sample the quality of what we will distribute to the young ones. Hopefully, this has not affected, greatly, my ability to think or write. 'Course, in reading this before posting; I sound a bit arrogant, eh?
Well, I know I am as smart and do as well as some financial advisors on this planet.
Sincerely and respectfully,
Mr. Catch

@Old_Joe I'm glad to see Paul Katzoff of IBD join the ranks of many financial writers who over the years have monitored FundAlarm and now MFO.
Regards,
Ted

One of the links MJG provided (and on which Chuck Jaffe's article appears based) is to a Natixis publication clearly intended for financial advisors. It draws from findings included a survey of 2400 financial advisors worldwide. The survey was commissioned by Natixis and conducted during June and July 2015 by CoreData Research. Of the 2400 advisors queried, only 300 were from the U.S. Here's the link again: http://durableportfolios.com/docs/593/246/Global Financial Advisor Survey Whitepaper_2015 archived_final.pdf
Natixis did not conduct the underlying research, nor does the linked publication include the raw research findings. What you are seeing is a glitzy, possibly slanted, promotional piece designed to enhance Natixis's business and assist its network of commission-based advisors. It's therefore hard to evaluate, since it isn't directed at retail investors, but, rather, to the advisors who offer, promote or sell Natixis funds. https://ngam.natixis.com/us/by-price-and-performance
Jaffe appears to be in error in calling his source a "study" - as most would understand that term. Nor, I'll argue, should his source be termed a "survey", since Natixis did not conduct the survey. More appropriately, what one gets here is Natixis's interpretation of a survey conducted by someone else.
For purely illustrative purposes, here's some phrases contained in the the Natixis publication which do not comport with how a scientific study should/would have been written:
"... a perfect storm"
"... where the rubber meets the road"
"... plenty of fodder to fuel a heated debate"
I wouldn't drive across a bridge for which the engineering study of structural integrity contained such vernacular/vague terminology. :))
Natixis's "conclusions" are listed at the end of the publication. They might best be viewed as both guidance and suggested talking points for financial advisors.
--- Put risk first.
--- Maximize diversification.
--- Use alternatives.
--- Make smarter use of traditional investments.
--- Be consistent.
(I suspect MJG, and many others here, here would agree with some, but not all, of the above recommendations.)

Hi Davidrmoran,
Your post has more than a small touch of bitterness. It also has the feel of desperation; the feel of a violent Kamikaze attack. That's too bad since better investment outcomes are more likely if learning and decisions are made in an unemotional way.
Yes, indeed I did read the two references that I posted. You often challenge me in that dimension, which is yet another measure of your bitterness directed at me. I assure you I am not hostile to anyone on MFO. I mostly post for educational purposes.
It was for educational purposes that I posted the two Links that you criticize. I especially referenced the Natixis PDF because it was a nice review of their baseline survey methodology. It was not the survey paper that Jaffe referenced. I extracted the rough number of investors and financial advisors generally surveyed from that review document. One objective of the Natixis work is to help advisors provide more useful service to their customer base.
You certainly should express your opinion on any topic posted on MFO. Your standards are not the same as mine. I'm sure each MFOer has his own set of standards. Hooray for those differences and the freedom to express them, hopefully in a friendly and constructive manner.
Recall what Marcus Aurelius said: "Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth." That quote is particularly insightful when discussing investment matters.
Best Wishes.

Hi Old Joe,
We seem to be in complete agreement that both investors and their financial advisors are likely overly optimistic with respect to portfolio returns in the next decade. According to the surveys, financial advisors attempt to dampen the enthusiasm of their clients. That's probably a good policy. Realism is always superior to wishful optimism.
We part ways when assessing the worthiness of the Jaffe article that was referenced. It is not BS. To summarily discredit the article as BS does a disservice to Chuck Jaffe, to the company who conducted the surveys, and to the MFO membership.
Jaffe has been a respected and widely recognized financial writer for decades. He would never risk compromising his reputation by inventing statistics or referencing a faulty survey. He did not do so in the current article.
Jaffe relied on statistical data collected by an outfit (Natixis) that frequently does worldwide financial surveys. Typically their surveys question over 7000 individual investors and/or over 2000 financial advisors. These surveys are conducted in double digit countries.
You might not trust surveys. That is your choice. But the surveys seem to be very well designed and honestly conducted.. Before assigning the BS perjorative to Jaffe and the Natixis Global Asset Management firm, I suggest you visit the two Links that are now provided:
http://www.aaii.com/authors/chuck-jaffe
http://durableportfolios.com/docs/593/246/Global Financial Advisor Survey Whitepaper_2015 archived_final.pdf
Perhaps these documents might soften your strong opinion. I hope so. Neither Jaffe nor Natixis deserve your BS judgment. You may not believe the survey results, but they are the results.
Best Wishes.

Hi Guys,
Not only are investors far too optimistic of the level of near term return likelihoods, but their financial advisors are too optimistic also. It is not likely that the average portfolio will deliver the 5.9% returns over inflation that the professional advisors are currently projecting.
Given our low GDP growth rate of about 1%, the odds are against the good times that our advisor class is forecasting. The current GDP and irs coupled productivity growth rates are more than two times below our historical average. The other contributor to annual returns, the market's P/E ratio level, is far above its historical average, so the most probable direction for that contributor is downward, a regression-to-it's-mean movement which will subtract from returns.
Both these returns factors suggest muted near term equity returns, not necessarily negative, but perhaps a factor of two below the historical returns. This forecasting method, which has long been advocated by John Bogle, is not highly accurate for any given year, but it does a very respectable forecasting job over a timeframe like a decade.
According to that returns equation, expect muted equity returns, even below those endorsed by the reported financial advisor wizards. Retirement dates might need to be delayed for those assuming near historical equity market returns. That's not a high probability future. Sorry about that, but that's the way the cards are likely (never a guaranteed outcome) to play out in the next decade.
Best Wishes.

https://www.sec.gov/Archives/edgar/data/1376720/000139834416019748/fp0022085_497.htm
497 1 fp0022085_497.htm
STEWART CAPITAL MID CAP FUND
(a series of Stewart Capital Mutual Funds)
Supplement dated October 19, 2016 to
the Prospectus and Statement of Additional Information dated May 1, 2016
This Supplement provides new and additional information beyond that contained in the Prospectus and SAI and should be read in conjunction with the Prospectus and SAI. This Supplement supersedes any information to the contrary in the Prospectus, SAI, and the Supplement filed September 27, 2016.
The Board of Trustees of Stewart Capital Mutual Funds has concluded that it is in the best interests of Stewart Capital Mid Cap Fund (the “Fund”) and the Fund’s shareholders that the Fund cease operations. The Board has determined to close the Fund and redeem all outstanding shares on or before November 18, 2016 (the “Redemption Date”).
On September 27, 2016, the Fund stopped accepting new investments and stopped pursuing its stated investment objective. The Fund will liquidate its portfolio and will invest in cash equivalents such as money market funds until all shares have been redeemed. Any required distributions of income and capital gains will be distributed as soon as practicable to shareholders and reinvested in additional shares, unless you have previously requested payment in cash. Shares of the Fund are otherwise not available for purchase.
Prior to or on the Redemption Date, you may redeem your shares, including reinvested distributions, in accordance with the “How to Redeem Fund Shares” section in the Prospectus. Unless your investment in the Fund is through a tax-deferred retirement account, a redemption is subject to tax on any taxable gains. Please refer to the “Dividends, Distributions and Taxes” section in the Prospectus for general information. You may wish to consult your tax advisor about your particular situation.
ANY SHAREHOLDERS WHO HAVE NOT REDEEMED THEIR SHARES OF THE FUND PRIOR TO THE REDEMPTION DATE WILL HAVE THEIR SHARES AUTOMATICALLY REDEEMED AS OF THE REDEMPTION DATE AND PROCEEDS WILL BE SENT TO THE ADDRESS OF RECORD. If you have questions or need assistance, please contact your financial advisor directly or the Fund at (877) 420-4440.
This Supplement and the existing Prospectus dated May 1, 2016, provide relevant information for all shareholders and should be retained for future reference. Both the Prospectus and the Statement of Additional Information dated May 1, 2016, have been filed with the Securities and Exchange Commission, are incorporated by reference and can be obtained without charge by visiting www.stewartcap.com or calling the Fund at (877) 420-4440.

I am very grateful so many of you sent such thoughtful comments. I will continue to report on the DOL rule. If any of you are financial advisors who would be available for interviews, let me know plz: [email protected]
Thnx again!

FYI: (This is a follow-up article)
A nightmare scenario has haunted asset managers for years: What if the flood of cash that's poured into debt mutual funds since 2008 suddenly reverses, leaving a field of financial-market carnage behind?
Regards,
Ted
https://www.bloomberg.com/gadfly/articles/2016-10-18/mutual-funds-get-surge-pricing-for-costly-bond-flight

When a combined $58 million in lobbying dollars from the financial industry are targeted to the Senate Finance Committee ( for 2016 PACs and individual campaigns), I do not have to think very hard about whether money talks. Like another poster at MFO, it doesn't take much like this for me to become cynical. It is such an obvious affront.

FYI: (This is a follow-up article)
Without much fanfare, there’s been a trillion-dollar upheaval in a favored corner of America’s financial system: the money-market funds where institutional and retail investors park cash to earn returns better than bank deposits offer. The turmoil has been driven by new rules that go into effect this week. They’re meant to prevent a repeat of the crisis in September 2008, when investors found that funds they thought were as safe as banks were anything but.
Regards,
Ted
http://www.bloomberg.com/news/articles/2016-10-12/new-rules-transform-2-7-trillion-of-money-funds-quicktake-q-a

A couple great threads on the new DOL rules. (I'm still struggling to fully digest the longer one. :))
As a practical matter, I wonder (but don't know) how many regular readers here will be impacted by the changes. Suspect most who come here tend to be older self-directed investors relying largely on no-load ETFs or mutual funds. Many, it seems, do use broker-sponsored online portfolio design services (probably the wrong term). But I'd guess fewer than 10% are paying a human for advice at this point in their investing life.
There are some here who are financial advisors or pseudo-advisors. For them the ramifications are very real. I commiserate with anyone forced to deal with higher paperwork loads, face increased litigation, or jump through unnecessary hoops.

FYI: (This is a follow-up article)
Every financial advisor in the country has been debating the Department of Labor's new fiduciary rule, arguing about whether or not it's really good for investors. For my part, I’m on the record here and here saying that the rule -- which requires brokers who work with retirement accounts to put their clients’ financial interests ahead of their own -- is a boon for investors.
Regards,
Ted
https://www.bloomberg.com/gadfly/articles/2016-10-11/thank-you-merrill-lynch

Securities lending is indeed a part of the structure of most ETFs. While Vanguard returns all of the proceeds above its internal costs for this lending to ETF shareholders, so does Schwab, although in Schwab's case it uses an outside unaffiliated vendor to do the lending, which takes a cut of the lending proceeds. Schwab keeps none of these proceeds for itself. BlackRock is a different story, keeping a portion of the lending proceeds for itself, although the amount is small enough that 22% of Schwab's equity ETFs beat their benchmarks instead of merely tracking them. The financial risks of this lending is another story entirely and as your Forbes' article points out, Kevin, different fund companies have different policies on what they will lend.
Regarding the analysis in Deep Capture, I should add that its original author, Patrick Byrne is the CEO of Overstock.com, and a controversial figure himself:
garyweiss.blogspot.com/2016/05/overstockcom-ceo-patrick-byrne-loses.html

Keep Your Bonds, but Reduce the Risks JOURNAL REPORTS: FUNDS & ETFS
Some advisers are wary of using bonds in client portfolios. Here is why you still should own them and how to do it right.
As strong demand has pushed up bond valuations—depressing their already low yields—some investors and financial advisers are saying “enough” and are turning their backs on the sector.
Not so fast, say many bond professionals.
1. When bonds make sense...not just worry about yield. “If you own bonds for diversification, income isn’t something that you should [focus] on,” says Laura Thurow, head of asset manager research at Robert W. Baird & Co.
2. Know where risks may lie....In relation to Treasurys, junk-bond yields are roughly in line with historic averages, so they’re not in bubble territory, says Rob Balkema, who manages multiasset funds at Russell Investments.
3. Spread risk in a portfolio.. it is possible to balance them, says Kathleen Gaffney, who manages Eaton Vance Multisector Income Fund (EVBAX). She suggests dividing your bond portfolio into roughly equal parts, each dedicated to a particular type of risk
4. Diversify your sources ... Aviance Capital Management, in Sarasota, Fla., portfolio manager Jeff Walker likes preferred shares.... Convertibles also gyrate less than stocks, though they do move in sympathy with them, says Katrina Lamb, head of investment strategy at wealth-management firm MV Financial, Bethesda. Md.
5. Bonds at lower valuations
Investors who want to temper the risk of principal loss could put some money into bonds that aren’t trading at high valuations. One with potential for appreciation is the U.S. Treasury inflation-protected securities, or TIPS, sector, says Mr. Worah of Pimco.'
....core U.S. consumer-price inflation already has risen above 2%, and Pimco believes it is likely to stay there for a while.
“The factors that have been keeping inflation down, the commodity price correction and strength in the dollar, have faded,” Mr. Worah says. “TIPS are the cheapest government bond” and are worth owning by themselves, he adds.
http://www.wsj.com/articles/keep-your-bonds-but-reduce-the-risks-1476064923
Goldman Asset Likes Inflation Bonds Amid Best Rally Since 2012
Wes Goodman, Bloomberg
“We like them a lot,” Mike Swell, the co-head of global portfolio management for fixed income in New York, said in an interview on Bloomberg Television Tuesday. “Investors are catching up to what a lot of us in markets already know, that inflation is picking up.”
TIPS have returned 6.9 percent in 2016, heading for their biggest gain since 2012, according to Bank of America Corp. indexes. Nominal Treasuries have returned 4.3 percent this year.
http://www.bloomberg.com/news/articles/2016-10-12/goldman-asset-likes-inflation-bonds-amid-best-rally-since-2012
Goldman Sachs Infl Protected Secs R6 GSRUX
iShares Barclays TIPS Bond Fund (Etf) TIP
https://www.google.com/finance?q=NYSEARCA:TIP&ei=GLL9V6GcAYepmAHR_qf4Cg

@bee, Nothing to disagree with Dr. Byrne's points. Wall Street has always had political allies who were purchased with contributions. And too many of the folks on Bloomberg and CNBC are good looking teleprompter readers and at most journalists, and definitely not economists or financial experts.
And from the WSJ: "The ETF With the 0.00% Fee”
Use the top article on this SEARCH.
Kevin

A whole lotta advisors are planning to get out of the biz. And a whole lotta investors are about to get hit with a surprise. Or two. Or three. Here's my report: http://www.investors.com/etfs-and-funds/personal-finance/are-you-one-of-the-small-investors-that-37-of-financial-advisors-are-planning-to-dump/

Thanks @Kevindow for that article. Most investors are clueless to this aspect of the financial world. Security lending has had a few issues to deal with, specifically unsettled trades or FTD (Failure to Deliver).
Here's a website that "scratches the surface" of the challenges that face the security lending and security trading industry.
deepcapture.com/category/introduction-an-overview-of-deep-capture/
The Presentation:
deepcapture

Low ER on high volume is still a very profitable business model for Vanguard and other large volume/low fee houses. Reminds me that high volumes of money (QE) loaned at record low interest rates is still a very profitable business model for banks and other financial institutions.

@MSF: You seem to know a lot about mutual fund distribution issues. Could it be that a wrap fee of 1% could work better in that it aligns the incentives of the financial advisor and the client? The typical criticism when financial advisors get compensated via loads is that it gives the financial advisor an incentive to churn their client's account. The financial advisor would not have such incentive if he gets paid via an asset fee.