CSA Initiate Consultation On Mutual Fund Fee Structure

The Canadian Securities Administrators yesterday released a discussion paper intended to solicit feedback on the structure of mutual fund fees in Canada. In addition to providing an overview of the current mutual fund fee structure, the paper identifies investor protection and fairness issues resulting from the current structure, and also considers the potential regulatory options available to the CSA to address the identified issues.

Specifically, the paper considers such issues as the lack of investor understanding of fund costs, potential conflicts of interest at the mutual fund manufacturer and advisor levels, the potential for cross-subsidization of commission costs, alignment of advisor compensation and services, and the potential for low-cost options for do-it-yourself investors.