February 09, 2017 9:07 am | Author: Spencer
The BC Securities Commission has been in the media talking about the importance of understanding investment fees.
Below are two stories related to a recent BCSC report that showed investors need to spend more time looking at the costs that come with investing their money.
Understand Your Investment Fees
According to recent BCSC research, investors in British Columbia can do more to improve their knowledge of investment fees – 28 per cent of investors do not know how their advisor is paid, and 36 per cent are not familiar with the types of fees they pay.
Investors under age 35 have a good understanding of investment fees, but are most likely to believe that a 1 per cent increase or decrease in fees will not have much impact on their returns. Similarly, investors with portfolios under $50,000 are less likely to know how much their advisor is paid. This group of is also less familiar with various types of fees, according to the report.
New Disclosure Rules for Investment Fees and Performance
Between now and July 2017, investors should have received, or will receive, their first Report on Charges and Other Compensation—an annual document that shows a breakdown of the total amount paid to their adviser’s firm during the year to manage their accounts and investments.
Investors will also receive their first annual Investment Performance Report, which outlines the market value of a portfolio. This information, when paired with an understanding of investment fees, can help start a conversation with a registered investment advisor.
These new reports and rules are part of the Client Relationship Model (CRM2), a set of Canadian Securities Administrators requirements that ensure investors receive essential information about the costs and performance of their investments. In 2016, we wrote about a set of videos that explain this initiative.
Learn More about Investment Fees on InvestRight.org
You can improve your investment fee knowledge with these resources on InvestRight.org:
If you have any concerns about a person or company offering an investment opportunity, please contact BCSC Inquiries at 604-899-6854 or 1-800-373-6393 or through e-mail at firstname.lastname@example.org. You can also file a complaint or submit a tip anonymously using BCSC’s online complaint form.
InvestRight.org is the British Columbia Securities Commission’s investor education website.