MFDA dealer backs CSA’s mutual fund fee proposals

Steadyhand Investment Funds, an MFDA dealer with offices in Vancouver and Toronto, released a comment letter that supports CSA’s mutual fund fee proposals.

The investment firm believes “the current structure of mutual fees should be dismantled. The payment for fund management and investment advice should be separated. Dealers, who provide advice to clients, should be left to determine how they will charge for their services.”

Read: Vanguard supports CSA’s mutual fund fee proposals

Further, Steadyhand outlines what needs to be accomplished to do so. Solutions should be:

1. Simple. It should be easy for clients to understand;

2. Transparent. The fees should be staring the client in the face. The client shouldn’t have to read regulatory documents or comb over transaction summaries to figure out what they’re paying;

Read: OSC seeks comment on CSA discussion paper

3. A compensation system for advice that’s designed and implemented by the people/firms who provide the advice;

4. Align the advisor as closely as possible with the client. If compensation is based on sales, the client will be sold more products. If compensation is based on advice provided, the client will receive more advice; and

Read: Firm to pay millions for mispriced mutual fund orders

5. Cost effective. The cost of operating any new structure should be low such that the dealers remain financially viable and clients benefit from lower fees over time.

Read the full letter.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.