British Columbia Securities Commission

British Columbia Securities Commission

January 23, 2017 12:05 ET

BCSC study confirms investors need to learn more about fees

As new fee reports begin arriving, many investors remain unware of how and how much they pay their investment advisors

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan. 23, 2017) - Just in time for RRSP season, many investors will receive new information about the fees they pay for investment products and advice, and the British Columbia Securities Commission (BCSC) wants to ensure that investors are ready to "Take a Look" at that information.

The BCSC launched its Take a Look campaign in October 2016 to encourage investors to pay attention to the fees they pay for investment products and advice. And according to a recent study conducted by the BCSC, B.C. investors still have some significant gaps in fee knowledge. Of investors surveyed, 28 per cent do not know how their advisor is paid and 36 per cent are not familiar with the types of fees they pay for the investment products they own. Only 44 per cent of investors agree that paying one per cent more or less in fees will make a difference to their returns.

"Some of the study results concern us," said Pamela McDonald, Director, Communications and Education, BCSC. "New securities regulations will be putting more information in the hands of investors to help them clearly see the fees they paid in the last year. We're conducting this research to show us how ready investors are to use this information and what else they still need to understand."

Beginning in January and February, investors will start receiving charges and compensation reports from their advisors as part of securities regulations called the Client Relationship Model, Phase 2 (CRM2). The BCSC is conducting a three-part longitudinal study to measure how well B.C. investors understand the fees they pay and how the new charges and compensation reports will affect investor knowledge and behaviour.

According to the BCSC's study, while 83 per cent of investors said they know whether the value of their portfolio went up or down over the last year, only half (51 per cent) know the total of amount of direct fees they paid in the past 12 months. And only a small group of investors, 34 per cent, know the impact of the indirect fees they pay from their investments.

"Fees impact your returns over time. Fees are a fact of investing and we want to empower investors to discuss them with their advisors," said McDonald. "This is why we created a number of new online tools like our fee calculator, to help make this important information more accessible."

The BCSC released new tools as part of the Take a Look campaign, including a fee quiz, fee guide, and investment fee calculator. Available on the BCSC's investor education website InvestRight.org, the fee calculator allows users to directly compare different fees and see their impact on investment returns.

The BCSC's Investor Readiness for Better Investing study was conducted by Innovative Research Group Inc. in November and December 2016. For more information on the research findings, visit BCSC InvestRight.

About the British Columbia Securities Commission (www.bcsc.bc.ca)

The British Columbia Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:

  • A securities market that is fair and warrants public confidence
  • A dynamic and competitive securities industry that provides investment opportunities and access to capital

Learn how to protect yourself and become a more informed investor at www.investright.org.

To view the backgrounder accompanying this release please click the following link: http://media3.marketwire.com/docs/BCSCBackgrounder.pdf

Contact Information

  • Media Contact:
    Alison Walker
    604-899-6713

    Public Inquiries:
    604-899-6854 or 1-800-373-6393 (toll free)
    inquiries@bcsc.bc.ca