Cheap ETFs put pressure on Canada: Toronto advisor

Cheap ETFs put pressure on Canada: Toronto advisor

Cheap ETFs put pressure on Canada: Toronto advisor

The pressure is on for Canada to play catch-up now that Fidelity Investments in the U.S. is offering the cheapest ETFs on the market, says one Toronto financial advisor.

“Any new product that comes out in the U.S. forces a rethinking in the Canadian market place,” says Chris Karram, partner with Safebridge Financial Group. “It certainly may put some pressure on those making the funds today in Canada.”

This sentiment comes on the heels of Fidelity's launch, last Thursday, of a suite of ETFs at an MER of just 0.12 per cent. Competitor, Vanguard, offers ETFs with MERs at 0.14 per cent.

At this stage, Karram says the announcement will have little impact on his dealings with clients. “The truth is, it’s not going to change the game overnight, but it has the ability to make a significant impact overall,” he says. “If it (the product) becomes available (in Canada), there will be clients that want to take advantage of that offering; those who are keen on minimizing fees and expenses.”

In the meantime, Karram says he will be looking into what Fidelity’s debut suite really has to offer. “It comes down to each client. Like any other product, there is no such thing as a one-size-fits-all,” he explains. “In today’s market, it’s not just about the cheapest. It’s more about what the value is ... and the cost to achieve it.” (continued.)


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