Fee disclosure rules aren’t making a difference

Investors must be sure to ask advisors pointed questions

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From the November 2015 issue of the magazine.

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Think new fee disclosure rules requiring advisors to be upfront with their clients about fees and portfolio performance are making a difference? Before you answer that, consider the following survey findings from a new J.D. Power study that canvassed 4,800 people who were using advice-based investment services from Canadian financial institutions:

fee disclosure


Effective July 2016, ongoing regulatory initiatives known as the Client Relationship Model-Phase 2 (or CRM2) will legally require all advisors to provide reports detailing account performance and all fees and other charges (including embedded commissions). But in the meantime, it still clearly pays to ask lots of questions.

One comment on “Fee disclosure rules aren’t making a difference

  1. July 1 2016 will be judgement day for Canadian advisors. Yes there are rules in place right now, but advisors ignore them. When mutual fund companies are forced to disclose all fees on their statements next year, many, many advisors will be looking for work. Why don’t they tell their clients how they are compensated? Simple. They aren’t worth it and they have no way to justify the massive commissions they are making/taking. My parents have an advisor whom they meet with a couple of times per year for a few hours. They have well over 1 million invested with him. They have asked over and over again for a clear accounting of how he and his company are paid and each time he says he’ll get back to them. I told them not to hold their breath. After reviewing their prospectuses, it’s clear that, with an average MER of over 2.5% with 1% going to the advisor, they are paying close to $30K per year for mediocre returns and a couple hours of face time with their “advisor”. Absolute brutal.

    No wonder people aren’t informed about what they are paying. The truth is too outrageous for advisors to disclose.


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