by Tom Bradley

When you call us to make a transaction in your account(s), we have to take a minute (hopefully less) to inform you of the Management Expense Ratio (MER) of the fund(s) you’re buying.

We’re required to do this by the industry regulator, the Canadian Investment Regulatory Organization (CIRO), as part of their effort to bring the industry into the 21st century on client reporting. We’re required to do this even though we report your full fee (to the penny) in every quarterly Client Statement. Even though you may already own the fund. And even though you get a Fund Facts document sent to you immediately if it’s a new holding.

The fee reported to you will cover everything you pay us. It includes investment management, advice, administration, service, account fees (there are none), and taxes. Other advisors that charge for advice, administration and service separately don’t have to report those fees when a fund is purchased.

Most of our clients don’t pay the fees published on our website, but rather a lower figure thanks to our Fee Reduction Program, so Neil (our CEO and tech guru) has enhanced our systems such that our Investor Specialists can give you the MER after all fee reductions.

As a reminder, your fee per dollar invested drops as your assets grow and the longer you’ve been a client. The average all-in fee paid by Steadyhand clients is less than 1%.

Our team isn’t happy with this regulatory requirement because it potentially gets in the way of more meaningful discussions, perhaps about your asset mix, RRIF payment, or pre-authorized contribution. But we’re trying not to make the regulation too burdensome for you. In fact, we’ve found many clients have been pleasantly surprised to hear their fee is even lower than they thought.

Now the rant.

We’re frustrated with this initiative because we’ve been leading the charge on client reporting and better transparency while many larger players with far more resources have been dragging their feet. We walk the talk (and have done so for 17 years) while industry neanderthals give the regulators no choice but to put more rules in place. Instead of being rewarded for our leadership, we’re being dragged down by the laggards.