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Wealth Professional | 11 Sep 2015, 08:15 AM Agree 0
You wouldn’t think a financial professional who made the switch to a fee-based model more than seven years ago would have any sympathy for those flogging DSC funds – but you’d be wrong
  • Susan | 11 Sep 2015, 10:16 AM Agree 0
    My thoughts exactly
  • Brad Jardine | 11 Sep 2015, 10:49 AM Agree 0
    Seems a few big industry players have been longing for this for quite a while. Let's take these small advisor books and move them to employee status at the side counter... all under the guise of transparency and retail investor betterment. Can't afford to get established in the business? Come and work for us, we'll take care of you.
  • Mark | 11 Sep 2015, 11:14 AM Agree 0
    This scenario assumes that 100% of the clients will agree to a fee based structure and don't leave to manage their own accounts or go to a bank for their investments. It also doesn't take into account those clients with assets under $500,000 which is probably the cut off limit for an advisor to generate enough fees to cover the costs for all of the necessary client services.
  • Brett Rees | 11 Sep 2015, 11:59 AM Agree 0
    I agree 100% with the smaller advisor or one's getting ready to semi retire. Many papers are now coming out that this has hurt the "average" investor where embedded commissions have been eliminated. Who are the ones every Government is concerned for. Last year I tried to find some investment advice for my Mother in the U.K. As soon as they heard what I was requesting and who it was for, they lost all interest as the portfolio was not large enough for them to handle. This already happens here where most stock brokers, or many, will not speak to you unless you have a minimum $ 250,000. What AVERAGE Canadian has that much in their RSP when statistics show only 10% of the population took advantage of the increased TFSA contribution limit. Let the consumer have the choice. Design a Government approved letter of engagement designating that the clients choice of either, "fee for service" or, the Fund Company paying the commission with no out of pocket expense to the client, an embedded commission. Simple and would save millions in software, marketing material etc etc for the Financial Services Industry. Thank you.
  • Meagan Balaneski, CFP | 11 Sep 2015, 12:36 PM Agree 0
    Very well put. DSC is not evil, it's the lack of disclosure that needs to be addressed. And the transition issue is especially challenging for smaller books when you consider that there is no more DSC commission coming in, but previous DSC is only paying trails of 0.5%. That's when the real crunch time is. Once a book is fully transitioned it's a lot more stable. But until then it's a very challenging world indeed.
  • EthicalJeff | 11 Sep 2015, 12:42 PM Agree 0
    This article pretty much sums up what is wrong with the investment industry in Canada. Trailer fees should be banned in Canada just like they are in the UK. The new CRM2 world is coming and fee disclosure and transparency is a new reality in the industry. Financial advisors will have to become more cost competitive and/or adjust their lifestyle. No more living off hidden or hard to see fees and commissions that clients implicitly pay. Fees have to be justified by the value added that the advisor provides. Many simply do not.
  • Jeff | 11 Sep 2015, 12:48 PM Agree 0
    As a fee based investment professional for the last 17 years, this article pretty much sums up what is wrong with the investment industry in Canada. Trailer fees should be banned in Canada just like they are in the UK. The new CRM2 world is coming and fee disclosure and transparency is a new reality in the industry. Financial advisors will have to become more cost competitive and/or adjust their lifestyle. No more living off hidden or hard to see fees and commissions that clients implicitly pay. Fees have to be justified by the value added that the advisor provides. Many simply do not.
  • Andrew | 14 Sep 2015, 10:12 AM Agree 0
    We should ask the people who came up with this idea to take a 50% pay cut themselves. They should also justify how their actions have promote a healthy environment for the financial advisory industry. As the article suggested, it is the small investors that would not have access to quality advisory services (so are they promoting advise for the wealthy or those who can afford it?). All advisor have to complete min. 30 CE credit each year, what are the requirements for the regulators?
  • Mike | 15 Sep 2015, 11:28 AM Agree 0
    I agree with Andrew. No other industry has to keep repeating their fee. When are regulators going to tell us what they make. By the way, they have to tell us their income and value they are providing in every meeting, like I do.
  • Murray Schultz | 15 Sep 2015, 12:22 PM Agree 0
    I think Advisors have to look very closely at who their fund partners are and why they would simply acquiesce in this instance. It is very possible that the funds themselves (and therefore their distributors) want to stem the losses created by significant increases to overhead costs (in the form of compliance and other items). By removing the advisor from fees/commissions paid by the funds, they will have found substantial additional money to share with bloated regulators and their own top-heavy management rosters. As for the investors, they usually welcome choice and are very aware of their costs, whether DSC or otherwise. Those who claim ignorance (usually after a market turn or change in personal circumstance) are also very aware of their costs but prefer to blame the nearest likely target for their situation.
  • Brett Rees | 16 Sep 2015, 11:53 AM Agree 0
    I have to laugh at these people who are putting down the scourge of the Fund Industry, trailers fees. As one advisor already stated .5% trailer, of which we are paid our cut" You people charge them a fee in excess of 1% per year and more in some cases, and you think we are ripping the client off. Love your rose coloured glasses, guess your clients must wear them as well. There are many good and bad examples in all industries. None of them the result of paying commissions.
  • Lynda | 22 Sep 2015, 11:12 AM Agree 0
    It's interesting to see how CRM2 has pitted fee-based advisors against commission-based advisors. In actuality, CRM2 is over-weighted on the affluent side of the scale. Once again the have nots (investors) are being shafted. The regulators are already away of the fact via mystery shopping that investors with less than $250K will not be properly served as they are not cost efficient to the advisor. Instead of fighting amongst ourselves, let's campaign for a win/win solution (advisors and investors).
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