Financial Literacy – Focus on Your Fees
November is Financial Literacy Month, and this year’s theme is “Take charge of your finances!”
Over the past four years, we’ve been asking British Columbians to take a look at their investment fees. A big part of taking charge of your investments is understanding what you are paying to invest. When you know what you pay to buy, sell, or hold an investment, it can help you make more informed decisions.
If you are an investor, we encourage you to set aside some time this month to look into the investment fees you are paying and discuss them with your registered investment advisor.
Know Your Investment Fees
Investment firms must provide clients with an annual summary of all fees paid the previous year for services and advice. They can choose how to provide this information to you, and it may be provided separately from your investment statements.
Step One – Read Your Investment Fee Report
A good first step in taking a look at your fees, would be to find your most recent fee report. It may have been mailed to you, or you could have received it online. Delivery depends on how you’ve chosen to receive statements from your firm. If you can’t locate it, call your firm or investment advisor and ask them to send you the report.
Step Two – Familiarize Yourself with Your Investment Fee Structures
Once you have your report in hand, take a close look at it. You may want to reference our Fee Guide when you’re going through the report. It will help you understand the types of fees you pay and how your advisor is paid. It also explains when your advisor should explain the fees and charges you are paying.
Remember, fees and other charges are a part of investing, but that doesn’t mean you can’t ask questions or try to negotiate a different fee structure.
Understand the Impact of Investment Fees Over Time
We have an Investment Fee Calculator to help people understand how fees impact investment returns. You can use it to compare how fee rates affect returns over a 20-year period. You may be surprised at how much just a one percent difference in fees makes on returns over time.
We also have a dedicated page on InvestRight.org that features the fee calculator along with resource videos and two other calculators – the Return on Investment and Investment Growth calculators. This suite of tools can help you develop a deeper understanding of how investing works, and how you can have productive conversations with your investment advisor.
Talk to Your Advisor About Investment Fees
Taking control of your investments requires you to have a good working relationship with your registered investment advisor.
A good advisor should encourage you to be actively involved with your investments, and be willing to answer all of your questions. Don’t be afraid to ask a question if you don’t understand a strategy, investment product, fee, or service charge.
Our Empowered Investor Guide can help you better understand the things you should think about and do when working with a registered investment advisor.
Financial Literacy Month 2019
The Financial Consumer Agency of Canada (FCAC) website offers more information on this year’s theme and how you can help promote it. Use the hashtag #FLM2019 to follow and share information on social media, and check out the FCAC calendar for activities in your area.
Report a Concern
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 [email protected]. You can also file a complaint or submit a tip anonymously using BCSC’s online complaint form.