Regulators eye total cost reporting for investment funds and seg-funds

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“Consumers will better understand the cost of advice and asset management and be able to assess and compare the performance of segregated funds and investment funds,” said Robert Bradley, Chair of CCIR.

Under the proposals jointly developed by the CSA, CCIR, Canadian Insurance Services Regulatory Organizations (CISRO), Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA), clients would receive periodic reports showing the ongoing costs of owning seg funds and investment funds.

For securities investors, account statements would be expanded to reflect the fund expense ratio for each investment fund the client owns, expressed as a percentage. Annual cost and compensation reports for those investors would also be enhanced to include the total dollar cost of owning investment funds during the past year.

Segregated funds holders, meanwhile, would see comprehensive reporting of such information in a new annual report.

The proposals reflect advance consultations with investor advocates and market participants, as well as research on behavioural insights and tests of sample documents conducted with investors.

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