Steadyhand President and Co-Founder Tom Bradley has slammed wealth management firms that keep their clients in the dark about the costs they pay for investment services, saying that the practice is “more common than it should be.” As an example, he cited a recent regulatory decision involving CIBC.
“Recently it was reported that CIBC has been fined and will pay compensation of $73 million for double charging its clients,” Bradley wrote in a recent commentary. He went on to explain that on top of the account fee clients were paying, they were unfairly charged commissions on products that were included in their portfolios. The violation was self-reported and, he said, “may have been discovered as the bank readies itself for CRM2 reporting.”
“[T]hese dishonest activities by the banks (TD Bank and Scotiabank previously settled with the OSC for similar violations) make my blood boil,” he wrote. “You can’t tell me that advisors and branch managers didn’t know this was going on.”
He also expressed frustration over the fact that the notice CIBC sent to clients made the bank look good for “reviewing [their] processes on an on-going basis” when, in his view, “[t]here should be consequences for the people involved.”
“CRM2 will shake out this kind of behavior,” he said. “It isn’t perfect (it doesn’t include the management fees on funds and other products), but it will allow investors to see what they’re paying their providers.”
CIBC to pay clients $73 million in compensation
Regulator campaigns for investor fee alertness