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The Voice of Canada’s Investment Funds Industry

Mutual Fund and ETF 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 and ETFs 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

2018
Advisor Insights: Global Regulatory Developments in Investor Protection (May 2018)

This issue of Advisor Insights focuses on regulatory developments in 16 countries and is based on a research report that was updated in May 2018. It summarizes report findings in a number of areas, including expanded disclosure, targeted reforms, best interest standard and embedded commissions and includes key points for advisors to discuss with clients.


Advisor Insights Modest Investors – Easy Access and the Freedom to Choose are Keys to Successsful Long-term Investing (January 2018)

This issue of Advisor Insights contains data on the household assets of Canadian investors and provides insights on the difference that access to advice can make in their long-term savings.


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.




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.

2017
IFIC President Calls for Choice and Access to Advice for Canadians

Text: Safeguarding Access to Financial Advice for Canada's Middle Class (June 15, 2017)

IFIC Submission – CSA Consultation Paper 81-408 – Consultation on the Option of Banning Embedded Commissions (June 9, 2017)

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Cost of Ownership

2017
Monitoring Trends in Mutual Fund Cost of Ownership and Expense Ratios: September 2017 Update

This report provides a comprehensive assessment of the full cost of owning mutual funds in Canada and the United States. 2017 update to the 2012 study by Strategic Insight.


Economic Impact Assessment of Banning Embedded Commissions in the Sale of Mutual Funds - PwC