Say farewell to some great funds
RBC Direct Investing nixes mutual funds without trailing commissions.
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Clients of RBC Direct Investing can no longer buy some of Canada’s best mutual funds: offerings from Mawer, Steadyhand and Leith Wheeler. The reason: those funds don’t pay trailing commissions. At about 1% for typical equity funds, trailers compensate dealers for investment advice. Discount brokerages don’t offer advice, but trailers are a lucrative revenue source. RBC says eliminating these funds benefits clients confused by inconsistent fee schedules. John DeGoey, an adviser at Burgeonvest Bick Securities, says RBC shouldn’t be receiving trailers anyway. “It’s reprehensible the industry allows discount brokerages to receive trailing commissions for advice neither sought nor received.”
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