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  • 2019 Federal Budget Analysis February 27, 2019
    Watch this space for response and analysis of the federal budget from CCPA staff and our Alternative Federal Budget partners. More information will be added as it is available. Commentary and Analysis  Aim high, spend low: Federal budget 2019 by David MacDonald (CCPA) Budget 2019 fiddles while climate crisis looms by Hadrian Mertins-Kirkwood (CCPA) Organizational Responses Canadian Centre for Policy […]
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  • CCPA-BC welcomes Emira Mears as new Associate Director February 11, 2019
    This week the Canadian Centre for Policy Alternatives – BC Office is pleased to welcome Emira Mears to our staff team as our newly appointed Associate Director. Emira is an accomplished communications professional, digital strategist and entrepreneur. Through her former company Raised Eyebrow, she has had the opportunity to work with many organizations in the […]
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  • Study explores media coverage of pipeline controversies December 14, 2018
    Supporters of fossil fuel infrastructure projects position themselves as friends of working people, framing climate action as antithetical to the more immediately pressing need to protect oil and gas workers’ livelihoods. And as the latest report from the CCPA-BC and Corporate Mapping Project confirms, this framing has become dominant across the media landscape. Focusing on pipeline […]
    Canadian Centre for Policy Alternatives
  • Study highlights ‘uncomfortable truth’ about racism in the job market December 12, 2018
    "Racialized workers in Ontario are significantly more likely to be concentrated in low-wage jobs and face persistent unemployment and earnings gaps compared to white employees — pointing to the “uncomfortable truth” about racism in the job market, according to a new study." Read the Toronto Star's coverage of our updated colour-coded labour market report, released […]
    Canadian Centre for Policy Alternatives
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The Progressive Economics Forum

Investors Gouged by High Fees

Good coverage in the Globe for the CLC’s calculations on the huge negative impact of high management fees on investment returns from RRSPs and the like, as opposed to the low cost CPP.

Does anybody out there find the investment fund industry response (we are providing good advice) convincing? If so, you will just love PRPPs!

Enjoy and share:


Comment from rcp
Time: December 6, 2011, 12:49 pm

And of course, you can avoid high fees by investing in low-cost ETF’s. That’s the obvious solution. Vanguard launched six Canadian ETF’s today and every one of them has a management fee of under 0.5%.

Comment from Andrew Jackson
Time: December 6, 2011, 4:08 pm

As I understand it a lot of ETFs are pretty risky since the seller does not always hold what are supposed to be the underlying assets. But good luck with them.

Comment from Andrew Jackson
Time: December 6, 2011, 4:13 pm

And you usually incur brokerage fees buying and selling ETFs

Comment from rcp
Time: December 6, 2011, 7:04 pm

Andrew, you have to read the prospectus: some ETF’s are risky and some are not. Almost all iShares, Claymore, and Vanguard ETF’s hold the actual underlying assets – the synthetic ETF’s that you might be thinking of are bigger in Europe than in Canada or the US.

A $9.99 brokerage fee (if that, some brokerages now offer free ETF trading) on say a $2000 investment amortized over five years is 0.1%.

The “high management fee” talking point is getting old. Nobody has to pay high management fees. It’s pretty simple, and the CLC does itself no favours by mindlessly repeating it. I feel sorry for people in high management fee mutual funds, but their obvious solution is to switch to low-cost ETF’s.

Comment from Eric Pineault
Time: December 6, 2011, 7:14 pm

On a strictly personal note, to avoid the paradoxes of self-contradiction, our savings are in held in the form of public debt sold here in Québec by the public provider “Épargne placement Québec” equivalent to canada savings bonds, difference being that their product line is much more complete, resembles what mutual fund managers and banks offer, and no fee’s. (they even have a stock index bond offer, tied to an index of 30 Québec based companies.) Anyhow, this personal solution keeps me out of mutual funds. But what I realized is that Épargne placement Québec does’t offer RESP’s, there is no public option for this type of savings plan, and a friend of mine who has a handicapped daughter informed me that the same goes for Registered Disability Savings Plan. Now both these regimes imply some level of public contribution to the savings plan, which in another way of looking at things given a 2% annual management fee is a direct 2% times X million $ to mutual funds and banks. Somebody should calculate this.

Comment from rcp
Time: December 6, 2011, 8:06 pm

Eric, you don’t have to pay 2% per year. It’s really that simple. If you’re paying more than 0.5% per year, think about switching.

Comment from Purple Library Guy
Time: December 6, 2011, 11:58 pm

Not sure it matters what people have to pay. That kind of financial instrument functions as what the Dilbert guy calls a “confusopoly”, much like cell phone plans.

Comment from rcp
Time: December 7, 2011, 1:18 am

PLG, I don’t agree. Read this and see if you find it confusing:


It’s not a cell phone plan. Lower MER on a broad index is unambiguously better than high MER on the same index.

Comment from Paul Tulloch
Time: December 7, 2011, 11:24 am

Being on this subject I thought an article one of my FB freinds (Trish) posted today by George Monbiot – it kind dovetails into this subject. He cites a study that shows

“traders and fund managers across Wall Street receive their massive remuneration for doing no better than would a chimpanzee flipping a coin.”

Bottomline- I don’t know too many fund managers that are not well-off. At least starting at the middle of that food chain and on up. Whether it be fees, or other compensatory measures, investors get gouged for the services provided.

My favourite line in the piece is this little but massive tidbit- “If wealth was the inevitable result of hard work and enterprise, every woman in Africa would be a millionaire.”

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