RBC reduces mutual fund fees

RBC Global Asset Management latest institution to limit the fees investors have to pay, promising greater transparency for investors

Royal Bank of Canada’s asset management division – RBC Global Asset Management – has implemented a series of fee reductions across its mutual funds selection. The announcement comes just after the Canadian Securities Administrators revealed it would hold consultations this fall to investigate the possibility of banning trailer fees and other embedded commissions in mutual fund sales.

With the industry undergoing a shift away from the old higher-fee system, RBC GAM has reduced its management fees on 85 funds by up to 0.15 per cent. The group also includes BlueBay Asset Management and Phillips, Hager & North Investment Management and currently manages more than $370 billion in assets. That means with the latest discount on fees, clients can expect around $25 million in annual savings, according to RBC.  

President of RBC GAM Doug Coulter explained the importance of creating better value for clients and moving with the times when it comes to fees.

"Along with performance, fees are one of the key considerations for mutual fund investors. At RBC Global Asset Management, we believe mutual fund fees should be up-front, easy to understand and most importantly low," he said. "We are excited to implement these changes and to continue to earn our clients' confidence and trust by offering award-winning investment management and fees that are low and easy to understand."

In order for clients to easily understand how these changes will affect them, RBC GAM has launched the Simply Lower microsite. On the site, clients can access educational tools that explain different concepts such as “management expense ratios” and “how to understand your returns”, as well as offering comparison charts and easy to understand guides.

Employing 1,300 employees across Canada, the United States, Europe and Asia, RBC GAM is the latest large financial institution to show its intention to move away from the traditional models that characterised mutual funds in the past.

Related Links:
CSA propose ban on trailer fees, embedded commissions for mutual funds
Regulatory changes to shake up advisor-client relations in Canada