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The Voice of Canada’s Investment Funds Industry

Mutual Fund Fees

There are costs to owning any type of any financial product, be it insurance, a deposit account, securities or an investment fund. Of all of these products, mutual funds are the most transparent and regulated when it comes to cost. Most important, 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.



Documents

2017
IFIC CEO Responds to Release of CSA Consultation Paper on Embedded Commissions

CSA/SRO Compensation Surveys Fail to Justify Ban on Embedded Fees

2016
Infographic: Value for Your Mutual Fund Fees

This infographic highlights the services that retail investors receive for the fees that they pay through their purchase of mutual funds.


Advisor Insights: Will Rules in Other Countries Lead to New Regulations in Canada?

Securities regulators in Canada and internationally have increased their focus in recent years on regulatory reforms aimed at improving investor protection and enhancing the investor experience. This issue of Advisor Insights looks at one area under regulatory review: advisor compensation.


Media Backgrounder - Research on Factors that Drive Mutual Fund Flows

2015
Investor Economics - Analysis of Factors Influencing Fund Flows - September 2015

IFIC Pollara Investor Survey (October 2015)



CSA Consultations

The way in which dealers and advisors are paid has evolved over the past two decades, moving from one where investors paid a significant up-front fee – often nine per cent – to one that encouraged long-term holdings with penalties for early withdrawal. Many mutual funds have eliminated the front-end and back-end fees, preferring to pay dealer and advisor costs from the trailer. There is a misconception that 100 per cent of trailer fees are paid to the advisor. Trailers fees actually are paid by the fund company to the dealer to help cover costs, including the costs of complying with Canada’s rigourous regulatory requirements, with only a portion going to the advisor. Advisors who are primarily paid through trailers are, in effect, being compensated on an installment basis.

These competitively priced, built-in fees are another reflection of the pooling principle behind mutual funds, and make advice affordable and readily available to all investors, regardless of account size.

2013
IFIC Submission to CSA – Discussion Paper 81-407 Mutual Fund Fees (April 12, 2013)


Cost of Ownership

2015
2015 Update - Monitoring Trends in Mutual Fund Cost of Ownership and Expense Ratios - A Canada - U.S. Perspective

May 2015 Update to the 2012 study by Investor Economics and Strategic Insight


2013
U.S. and Canadian Mutual Funds Costs to Advisor-Assisted Investors are Comparable - New Studies Show