Banks misleading on mutual funds

[MortgageQueen]

Excellent article describing big bank practices and the vagueness they use in describing fees. . .and how it affects you bottom line investment. It's worth the short read of the article. . . it's an investigative report.


"Canadians already pay some of the highest mutual fund fees in the world, but poor transparency from some financial institutions may be costing customers even more, a CBC investigation has found.". . . . .

"A 2011 report by U.S. investment research firm Morningstar gave Canada an “F” for its mutual fund fees, the only country out of 22 to get a failing grade." . . . ..




http://www.cbc.ca/news/business/stor...mber_208258971

[GoStumpy]

Definitely a good read!

My mutual funds have a 2.04% MER, which we can realize even if I made 8% return, they're taking 25% of my investment gains!

[Orbital14]

I would be very interested to see the other half of this investigation, which would be a look into the other half of our mutual fund market which is brokerage firms such as Investors Group, Edward Jones etc. Banks may have higher MER's but typically do not have any load fees. I believe you will find a lot of brokers pushing funds with similar MER and include additional front end load fees/ back end load fees/ trailing load fees and sometimes a combination. Not to mention the further biased information sometimes received due to these advisors being paid 100% commission.

Best advice is too always look for a second opinion on both the funds you invest in as well as a fee analysis on what you are paying to hold those funds, and look into other options such as ETF's that do not include the high MER/Fees often associated with Mutual funds in Canada.

[MortgageQueen]

You are right about 2 sides to the story. I think the expose was somewhat slanted toward Big Banks because Canadians tend to be somewhat naively trusting in their banks. . .much more so than a brokerage firm.
The best advice is to read the fine print/don't be bullied or overrode when asking about fees/and do your research.