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Ritholtz Wealth Management’s Josh Brown, also a frequent guest on CNBC, has recently written two columns on the intensifying futility in the asset management and brokerage industries. Mr. Brown is usually the last person to feel empathy for employees of high fee active management firms – he has railed consistently against the practices in the sector.

In the case of “I did everything I was supposed to do” however, a fictional account of a fund company executive being fired, based on recent conversations he’s had with actual people, Mr. Brown does give voice to the industry’s current frustrations (warning: along with some colourful language),

“We did a few roadshows. Saw clients in office buildings, hotel ballrooms, coffee shops, conference centers and even at a baseball game. “These are some of our highest conviction ideas…” That’s great Dave, they said without saying. We like you. Your internal expense ratio just doesn’t work in our allocations. They didn’t say that part either. It’s the subtext of every meeting. Fees, fees, fees. And taxes. We’re fiduciaries and you’re running up the clients’ tax bills, Dave.’”

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In June 13th’s “When Everything That Counts Can’t Be Counted,” Mr. Brown recounts the last decade’s nightmare environment for financial advisers and fund managers.

“There are no asset managers who represent their strategy to clients as “We buy the most expensive assets, and add to them as they rise in price and valuation.” That’s unfortunate, because this is the only strategy that could have possibly enabled an asset manager to outperform in the modern era. It’s one of those things you could never advertise, but had you done it, you’d have beaten everyone over the 10-year period since the market’s generational low. But almost every investment professional says that they do the opposite of this.”

I have told many brokers to their face that, “it’s too easy for you to make $300,000 per year once you’ve built up your book of client assets,” but on the whole my perspective on these issues is unreliable to the average investor. I worked with brokers and fund company executives for two decades and still call many of them my friends.

It is undeniable that fee consciousness and passive investing has been a huge benefit to investors. It’s entirely reasonable to view the failure of mutual fund companies with no more sympathy than stories about bankrupt buggy whip firms in the 1920s.

Mr. Brown’s stories underscore a finance industry changing quickly, and for the better. The business proposition for funds and financial advisers – the value they provide investors for the money – has been tested and in most cases found wanting.

It’s also important to remember that markets are cyclical. Over the long term, passive index-based investing has been shown to work best, but there will be extended periods where losses and volatility make these investments uncomfortable to hold. The hope is that by then, the finance industry will have evolved to the point where viable alternatives become available.

-- Scott Barlow, Globe and Mail market strategist

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Stocks to ponder

Superior Plus Corp. (SPB-T). With barbecue season here, Canadians are filling up the propane tanks. And judging by the surging stock price of Superior Plus Corp., they’ve already been filling up their portfolios with shares of Canada’s largest propane distributor. Toronto-based Superior, which controls an estimated 40 per cent of Canada’s propane market, has posted a sizzling total return, including dividends, of about 35 per cent in 2019 – more than double the total return of the S&P/TSX Composite Index over the same period. The gain reflects Superior’s solid first-quarter results and a recent decision to explore the sale of its specialty chemicals division to become a pure-play propane company. John Heinzl takes a look at the stock (for subscribers).

Nexus Real Estate Investment Trust. (NXR.UN-X). This security may resurface on the positive breakouts list (stocks with positive price momentum), and is best suited for consideration by investors seeking price stability and steady income. This REIT has a current yield of 8 per cent and the unit price has been quite stable over the past two years. The monthly distribution appears sustainable with a conservative payout ratio of 81.5 per cent. Oakville, Ont.-based Nexus owns a portfolio of 70 industrial, office and retail properties located across the country. Jennifer Dowty reports (for subscribers).

The Rundown

This strategist’s bold call at the start of this year was right on the mark. Here’s what he’s now predicting for the TSX

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At the beginning of the year, Laurentian Bank’s chief strategist Luc Vallée made a bold recommendation that turned out to be a great call. While investors were cautious, he was bullish, telling investors that now was the time to put cash to work and buy stocks. Several months later, the S&P/TSX Composite Index had advanced 16 per cent year-to-date, closing at a record high on April 23. The Globe and Mail recently spoke with Mr. Vallée to get his market outlook for the balance of 2019. Jennifer Dowty reports (for subscribers).

Economists optimistic loonie will rise by the end of this year

Observers expect that the Canadian dollar will rise against the U.S. dollar over the course of 2019, as more economists begin to anticipate a dramatic shift in U.S. monetary policy as the economy slows. The dollar fell 1.1 per cent last week against the greenback, and held near the 74.60-US-cents level on Monday. But the longer-term outlook is what’s more important here: As financial markets absorb the prospect of interest-rate cuts by the U.S. Federal Reserve later this year, the Canadian dollar should get a boost. David Berman reports (for subscribers).

ETF investors, the emerging trend of zero-fee funds is just a sideshow

ETFs are an example of capitalism at its finest. Intense competition between a growing number of companies has been driving fees lower for years. Now, there’s an emerging trend of funds with zero fees, or that actually pay shareholders a nominal amount. ETFs without fees may sound great, but they’re actually a distraction designed to divert investor attention away from a few key facts. Rob Carrick explains (for subscribers).

Why Slack doesn’t need a traditional IPO

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Unlike just about every single company that’s gone public in the United States, Slack Technologies Inc. will do so without one notable takeaway: new cash. Later this week, the maker of workplace-messaging software is expected to list its shares directly on the New York Stock Exchange, forgoing an initial public offering that would see the company issue equity in exchange for new funds. By going this route, Slack will avoid paying multimillion-dollar underwriting fees to Wall Street banks, and existing shareholders – including employees and venture capital firms – will be able to sell shares immediately. There’s a simple reason why Slack can spurn the traditional IPO process: it already has loads of cash. Matt Lundy reports (for subscribers).

Others (for subscribers)

Top stocks picks from Goldman Sachs: Strong EPS growth with reasonable valuations

‘Dividend traps’ a new worry for investors

Don’t be shocked if the Fed decides to shock the market

These ten TSX stocks show strong earnings momentum

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Wednesday’s analyst upgrades and downgrades

Tuesday’s Insider Report: Million dollar trades in two dividend stocks

Tuesday’s analyst upgrades and downgrades

Tuesday’s small-cap stocks to watch

Others (for everyone)

Here’s how to find out if you’d benefit from Ottawa’s new annuity initiative

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Compiled by Gillian Livingston

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