Sam Huszczo Bloomberg Magazine

There’s a Dark Side to Zero-Cost Investing You Can’t Ignore

Claire Ballentine | Bloomberg | November 3rd, 2019

One place where efficiencies could be made is in the legal department, which could hurt investors in the event of a lawsuit. Other savings could be made by constructing indexes in-house or licensing lower-cost alternatives, hiring second-tier custodians, or limiting any sales presence or advertising budget. These economies could result in damaging oversights, or increase the likelihood of the fund closing.

“I would be concerned about the compliance and legal aspect,” said Sam Huszczo, the founder of SGH Wealth Management, a $170 million investment adviser based in Detroit that uses ETFs. “Those are the two areas where I could see corners being cut.”

(Source: Bloomberg)