I was asked last week to do a media interview on investment fees. I agreed to do it because the fee landscape is particularly interesting right now. Investors have an increasing array of options as to how they invest and what they pay.
ETFs are not yet a big part of Canadian portfolios, but their low fees are setting the tone. Indeed, I’m happy to report that there’s been a decrease in mutual fund fees over the last decade. The moves haven’t been substantial and have favoured larger clients , but the direction is right. And importantly, fees have become a bigger differentiator, as lower-priced funds are garnering most of the new money.
There used to be more competition from direct-to-client mutual fund companies, which provide investment management and advice . Unfortunately, this low-cost category has been hollowed out by mergers and strategic repositioning , such that there are few players left.