At all times discover or ask for the MER and the TER, whole them up, and multiply by the full worth of your investments to seek out your true value.
I apologize, Shelley, I’ll have gone on about charges just a little longer than anticipated but it surely’s vital you’re conscious of the entire charges: the product value and the trailing fee.
The charges in keeping with the kind of mutual fund
The mutual funds you personal are probably A-class funds, and the MER contains each the product price and the 1% trailer price. My random Canadian Fairness Fund instance additionally has D-class and F-class variations of the identical fund, with MERs of 1.34% and 0.99%, respectively. D-class funds are meant for use for DIY traders, and “F” class funds are meant for price primarily based accounts. Neither has a 1% trailing fee.
Decreasing charges on mutual funds
To cut back charges, Canadian traders can take into account transferring A-class funds to both the D- or F-class model of the identical fund. There ought to be no tax implications for non-registered accounts, and the funds can have the identical funding holdings.
You’re right, Shelley, that there was a category motion swimsuit in opposition to firms providing self-directed investing accounts whereas accumulating trailing commissions. Consequently, funds with a trailing fee have been moved to a category model with out the trailing fee. Nevertheless, this isn’t the case if you’re working with an advisor.
Each investor ought to ask their advisor if they’ll transfer your present funds to the D- or F-class fund model. If they can not, examine to see if they’re out there on the self-directed platform.
A F-class fund model might not be out there on each self-directed platform, so if you would like the F-class model, and you might be comfy engaged on a self-directed platform, you might have to name round to the totally different platforms.
One final thing, Shelley. When checking to see if D- or F-class funds can be found, examine on-line first. Get the fund code for the D and F lessons. Then give the fund code to an advisor, or the individual you’re chatting with on the self directed platform, to see if it may be bought.