Understanding services and fees

The services you receive

When you buy a mutual fund, you receive services from your dealer (the company where your advisor is registered) and from the fund manager.

In 2017, you began receiving an annual report that focuses on the fees you pay for the services that you receive from your dealer, such as:

  • Understanding and reviewing your financial situation and needs, including how much risk you are willing and able to handle,
  • Guiding you to build and maintain your financial plan,
  • Buying and selling units of a fund for you, based on your needs and your ability to handle risk,
  • Providing you with account statements and other information, keeping detailed records about your account, and providing you with information and access to your account online.

In addition, your dealer belongs to an investor protection fund and to regulatory organizations that ensure the industry operates to high regulatory standards.

To learn more, view our infographic: Value for your mutual fund fees, or contact your financial advisor.

The costs that you pay

Your mutual fund fees pay for:

  • Services provided by your fund manager – the company that manages the mutual funds that you buy.
  • Services provided by your dealer – the firm where your financial advisor is registered.
  • Taxes to federal and provincial governments.

A new report tells what you paid your dealer last year

In 2017, you began receiving an annual report that tells you, in dollar amounts, what you paid over the previous year to your dealer, directly and indirectly, based on when you bought or sold all or parts of your investments. Your report includes fees for stocks, bonds, mutual funds and exchange-traded funds. It might also include charges for GICs as well as insurance products that have an investment feature.

The costs could include general administration and service charges, commissions, trading fees or referral fees. If you don’t understand any of the charges, ask your advisor for more information.

There are some costs not reflected in the new report, such as amounts paid to your investment fund manager(s) for the services that they provide.

Comparing the fees in your new report to a mutual fund’s MER

The fees that you pay to your dealer that appear in the personalized annual report that you began receiving in 2017 will not be the same as the Management Expense Ratio (MER) that is shown in the Fund Facts for the fund(s) you own. Here’s why:

  • The MER approximates the total cost of the fees charged by your fund manager(s) expressed as a percentage of your total average investment. In most cases, a portion of the MER, called a trailing commission, is paid to your dealer to cover the costs of the dealer services you receive. For investors who choose to pay their dealer directly, this fee is not included in the MER.
  • The new report provides a personalized dollar figure that was paid to your dealer to look after your account. It includes amount paid to your dealer by the fund manager, as well as amounts paid by you directly. It does not include fees retained by your fund manager for services that the fund manager provides.

To learn more, view our infographic: Value for your mutual fund fees, or contact your financial advisor.