Financial advisers fail to help investors improve their returns in mutual funds, according to a new academic report, The Toronto Star reports. The research, head by Peter Tufano, a senior associate dean at Harvard Business School, is based on analysis of the returns in 4,541 mutual funds that investors purchased between 1996 and 2002. As of 2002, two-thirds of the $3.8 trillion in assets held in those funds were purchased through a professional broker or adviser.

The researchers found that investors who had worked with an adviser or broker held a disproportionate amount of their portfolios in low-return money market mutual funds; funds with higher fees, including upfront charges, than if purchased directly; and trendy funds with recent strong performance. In fact, they found that the equity funds sold by brokers delivered average performance of 2.9%, compared to direct-sold equity funds' performance of 6.63%.

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