easy · Certified Financial Planner General Principles
A planner is considering two mutual funds for a client. Fund A is a no-load fund with an expense ratio of 0.20%. Fund B is a load fund with an expense ratio of 1.40% and identical historical returns.
According to the Fiduciary Tiebreaker (H2), which fund should be recommended?
- Fund A, due to its lower cost and lack of embedded conflict
- Either fund, since their historical returns are identical
- Fund B, as the load may compensate the planner for their ongoing advice
- A third fund that offers a performance-based fee to align interests
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