Canadian investors who held RBC or PH&N mutual funds through a discount broker may be eligible for compensation
RBC has agreed to a $45 million settlement over trailing commissions charged to investors who held its mutual funds through online discount brokers.
The deal covers anyone globally who held RBC or Phillips, Hager & North (PH&N) mutual funds through a discount broker between December 28, 2003, and July 25, 2024.
The class action was filed by Toronto-based law firm Siskinds LLP. It alleges the bank deducted trailing commissions – fees designed to compensate advisors for ongoing investment advice – from accounts where no advice was actually provided.
Discount brokers are order-execution-only platforms. Under CIRO’s rules on order-execution-only dealers, they are not permitted to give investment advice to clients.
What the lawsuit alleges
The lawsuit argues that investors received no value for the trailing commissions that reduced the value of their mutual fund holdings.
This is not an isolated case. Siskinds has filed similar actions against other major Canadian fund managers. In October 2024, TD Asset Management reached a $70 million settlement on trailing commissions paid to discount brokers – a case with near-identical allegations.
The broader issue has been years in the making. In 2022, the Canadian Securities Administrators (CSA) implemented a ban on trailing commissions paid to order-execution-only dealers, prohibiting the practice going forward. The class actions now seek to recover what investors paid before that ban took effect.
Court approval and key dates
The Ontario Superior Court of Justice will hold an approval hearing on September 8, 2026. At that hearing, the court will either approve or reject the $45 million settlement.
If approved, a distribution protocol will be established to outline how eligible investors can claim their share. However, the net amount reaching investors will be reduced. Siskinds LLP is seeking $12.6 million in legal fees from the settlement fund, plus court expenses and applicable taxes.
RBC has denied all allegations. The bank admitted no wrongdoing or liability and agreed to the settlement solely to avoid the cost and uncertainty of prolonged litigation, according to the settlement agreement.
What this means for advisors and their clients
Eligible class members are automatically included. No immediate action is required to participate in the settlement.
Investors who wish to object to the settlement terms or to the requested legal fees must file a formal objection by August 18, 2026.
Wealth professionals whose clients held RBC or PH&N mutual funds through discount brokerage platforms during the covered period should be aware that those clients may receive a payout. Proactively flagging this to affected clients is a straightforward way to demonstrate value and stay ahead of questions.
For advisors tracking regulatory enforcement actions and compliance developments across Canada’s wealth sector, this settlement is part of a wider pattern of accountability in the industry.
