FAIR Canada
FAIR Canada Newsletter

November 2013

Canadians Deserve Real Price Competition in Mutual Funds

Reform of mutual fund fees is essential for Canadians' retirement security as the existing fee structure is unclear, conflicted and incomprehensible to consumers, resulting in high costs, poor consumer outcomes and a lack of effective price competition.

 

There are more than 12 million Canadians who own mutual funds, with some $900 billion in assets under management; but, at the same time, Canadians pay some of the highest mutual fund fees in the world. Thus, a clear and non-conflicted fee structure is desperately needed to increase price competition and make fees easier for clients to understand. Canadians deserve to receive unbiased financial advice and to have fund managers compete for investors' hard-earned dollars through healthy competition.

 

First and foremost, the cost of financial advice should be charged separately from the cost of the financial product. Paying fees for advice separately and directly would allow for real price competition and result in a demand for better services and lower costs to consumers. This will encourage an efficient market as competition would be stimulated to provide consumers with advice and products that serve their needs. In turn, clients will be more likely to assess whether the services and advice they receive justify the fees paid. Advisors who provide the best services and products will benefit - and competitive forces will result in a more professional financial services industry.

 

This story first appeared as an Inside Track op-ed in the online version of Investment Executive.

To read the rest of the article on our website, click here

 

Fund Industry "In Denial"

 

In an opinion article published in the Financial Post entitled "Shake up the investment industry", Tom Bradley notes that '[d]iscussions around a Fair Dealing Model have been going on for 15 years, and yet the industry has taken no initiative to improve the situation. The fact that it fought so hard against increased disclosure of investment returns and fees was revealing - it's putting the interests of its shareholders decisively ahead of those of its fund holders."

 


Registration of Equity Crowdfunding Portals Essential

 

FAIR Canada submitted comments to the Saskatchewan Financial and Consumer Affairs Authority (FCAA), noting the great risk of fraud and potential for investor harm posed by equity crowdfunding. FAIR Canada's letter outlines our concerns regarding equity crowdfunding and provides specific portal recommendations. It also provides comments on specific elements of the FCAA's proposed order.

 

Read more...

 

Consistent Point of Sale Disclosure Important for Consumers

 

FAIR Canada has provided comments to the Bank for International Settlements, supporting the policy recommendations put forward by the international Joint Forum (comprised of the Basel Committee on Banking Supervision, the International Organization of Securities Commissions, and the International Association of Insurance Supervisors).

 

Click here to read the rest of the story.

 

Demystifying Financial Certifications

 

IIROC has announced that, as part of Financial Literacy Month, it has introduced a new glossary of financial certifications and designations for financial consumers, which is a free, easy-to-use service that helps investors sort through the large number of certifications in use by financial professionals, and understand what it takes to achieve them. FAIR Canada encourages consumers to carefully review the credentials used by financial professionals, to better understand the skills they offer. IIROC also offers other online tools to financial consumers, including AdvisorReport, where consumers can check the registration and background of advisors who work for IIROC member firms. IIROC notes its support for FAIR Canada in a fact sheet on its financial literacy and investor education initiatives.

 

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