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Explaining Investment Fund Fees

With the recent arrival of CRM2, advisors may see an increased interest by investors in understanding the costs of their financial products and how those costs compare across products or with the costs in other countries. Of course, there are costs to owning any type of any financial product, be it insurance, a deposit account, securities or an investment fund. For mutual funds and ETFs, it’s important to know that the costs are fully disclosed and reported as a total amount, usually including the cost of advice, and net of returns, so the investor knows what the real return is and how much s/he is paying. Investors in other countries, such as the U.S., may have to tally up management costs, trading costs and advisor and other hidden costs and then try to calculate their returns.

We offer some tools to help explain costs to investors along with more detailed studies and reports from independent third parties on investment fees.


New Infographic Helps Investors Understand What Services They Receive for Their Mutual Fund Fees

Advisor Insights: The Real Cost of Owning Mutual Funds in Canada and the U.S.

Model Report on Charges and Compensation: CRM2 - 2016 Requirement (June 17, 2016)

The raw template prepared by the regulators has been enhanced with simplified language and easy-to-follow layouts to improve investor understanding. Dealers can meet the requirements of CRM2 by providing separate reports or by integrating the information into their quarterly account statements once per year. The Model Report on Charges and Compensation was reviewed by staff at the Mutual Fund Dealers Association and their comments were incorporated. See IFIC’s guide “Preparing CRM2 Reports for Your Clients” for insights on preparing these reports.