Over the past 2-3 years, all 4 of the Big Banks (BMO, TD, CIBC and Scotiabank) have been found guilty of overcharging clients on management fees associated with their Mutual Fund sales (see article below). The level of overcharging, misrepresenting compensation and fees, is disgraceful. Collectively, in the first quarter of 2017, the Canadian banks made over $10 Billion dollars. $10 BILLION! Canadian consumers deserve much better.




The biggest mutual funds are largely with the banks, and this is causing some real problems for consumers.  When a mutual fund gets too big it becomes nothing more than an ‘index fund’, meaning that whatever index it tracks, it follows in performance. Funds with ~$10B+ in assets are no longer nimble, and fund managers can’t move into/out of equity of fixed income positions with the ease of other funds. The manager’s hands are effectively tied. There are two reasons why this is harmful;

1) The client thinks they have someone actively managing their money (They don’t).

2) The client is getting charged 2% or more per year for this ‘management’ when an ETF (Exchange Traded Fund) would do the same thing while only charging 1/10th the price. They’re getting ripped off. The chart below shows the cumulative effect of a 75 basis point (0.75%) difference in fees over the course of 30 years of investing. The difference to the client is staggering. A 1.5% or 2% difference in fees is outrageous.


I’m not sure if the people who work at the banks think about these things, or are even aware of it.


Being a competitor to the banks, we often hear different things from clients, regarding the banks. As an independent advisor I hear things like, “My bank rep says you charge higher fees” or even better, “You work on commission, they’re on salary”. These arguments are misleading to the point they’re funny.


Harbour Financial Group Advisors have access to thousands of mutual funds, from dozens of different mutual fund companies, and we will pick the right product for you. Being independent means we are not influenced by any commission driven sales, nor told by anyone to sell a certain product. We have the client’s interests at heart. It’s the reason we chose to be independent and the reason why our business keeps growing.


The best advice you can get from anyone is independent, uninfluenced, educated advice. Same goes for Financial Advice. We are a team of independent, highly educated, financial advisors who can help you plan for your financial future. Please contact us today to speak to one of our advisors.

– Geoff Wareham, B.Sc.


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