This ALERT is for investors who buy mutual funds via a
discount broker. Discount brokers shouldn’t be collecting opaquely disclosed trailer
commissions intended to provide you with investment advice. The obligation to
provide investment advice is contained in Fund Facts , the document you were
given before you bought the fund .A recent report provided by securities regulators tells
us that about $25 Billion in mutual funds at discount brokers
are A class ( a class of fund with a portion of the cost intended for advice per Fund Facts) which means that investors are being overcharged .Since discount brokers cannot and do not provide
investment advice, clients of A class funds are being robbed of returns.Clients are
not being treated fairly, honestly and in good faith as required by securities
laws. We've been asking Regulators for years to enforce the law; we're
still waiting for an answer.
By
the way, at 1% trailing commission, that amounts to an astounding $180,000,000
each year that isn't going towards the retirement funds of Canadians! Shameful,
no?
So,
ask your discount broker what fee you are being charged to buy and own mutual
funds. If it’s D class or involves a small one time upfront charge , that’s OK.
But if you are being charged an ongoing trailer commission for advice, you are
being charged for a service
that is not being provided. Ideally, the charge would be equivalent to what you’d pay to buy an ETF, around $9.95
that is not being provided. Ideally, the charge would be equivalent to what you’d pay to buy an ETF, around $9.95
