In Stenzler v TD Asset Management Inc., the Ontario
Divisional Court recently denied an appeal by TD Asset Management
Inc. ("TDAM") from a decision certifying the
Plaintiff's action to recover trailing commissions he alleges
were improperly paid by TDAM to Discount Brokers1.
TDAM pays trailing commissions to Discount Brokers on behalf of
investors who hold TD Mutual Funds through a Discount Broker.
Trailing commissions are intended to compensate mutual fund dealers
and investment advisors for investment advice. Discount Brokers,
however, are prohibited from providing advice to investors. In
recognition of the problems with this practice, the Canadian
Securities Administrators recently announced a ban on the payment
of trailing commissions to Discount Brokers starting in June
2022.2
