Learn more about the fees and other charges you may pay for different types of investment products.
Learn more about how your investment advisor is paid.
Learn more about the Client Relationship Model, Phase 2 (CRM2).
How much do you really know about your investment fees? Take our Fee Quiz to find out.
Try our Investment Fee Calculator to take a look at how fees impact your returns.
There are fees and other charges you will pay when you invest. It’s important to know what you’re paying for your investments and/or the investment service provider you are using. Investment fees are a part of investing....
Read moreThere are fees and other charges you will pay when you invest. It’s important to know what you’re paying for your investments and/or the investment service provider you are using.
Investment fees are a part of investing. Some may be negotiable, so it’s important to read the information your investment service provider gives you.
As a Canadian investor, you should receive detailed information at least once a year that shows the fees paid to your investment service provider for their services and/or advice. Securities laws, known as the Client Relationship Model, Phase 2 (or CRM2), require investment firms to provide all clients with a detailed annual report about the operating, transaction, and related fees and other charges.
Ask questions if you’re not clear on what you’re paying for investments and/or advisory services.
Two types of investment fees you may come across are: direct fees and indirect fees.
Your investment service provider, such as a registered investment advisor and their firm, a robo-advisory service, or a self-directed investing service, receive fees for the services and advice they provide.
Simply put, direct fees are fees you pay directly.
They may be paid by cheque, electronic funds transfer, or other similar manner, or they may be deducted directly from your account.
While the language that different firms use can vary, direct fees include:
Indirect fees are not paid by you directly, but rather by third parties in connection with the investments in your account.
Again, while the terminology can vary between firms, indirect fees include:
Ask your registered investment advisor or check with your service provider for information about fees and account charges if you have questions.
So why should you pay attention to your investment fees?
Investment fees impact your overall returns.
When you understand your fees, you can evaluate the true cost of the investments in your portfolio and the services you receive from your investment advisor or service provider.
Knowing what you pay to buy, sell, or hold an investment in a given year can help you make better investment decisions.
If you have questions, the BC Securities Commission can help.
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Cryptocurrencies and blockchain are the same thing.
Correct Answer: False
Blockchain is a type of digital ledger. A digital ledger records transaction information and then duplicates and distributes the information across the entire network of computer systems on that ledger. A cryptocurrency, on the other hand, is a digital asset that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.
Regulators and law enforcement can’t trace cryptocurrency transactions.
Correct Answer: False
Cryptocurrency transactions can be traced. Though cryptocurrencies can be created, moved, and stored outside the purview of governments, regulators, and financial institutions, each transaction is recorded in a permanent fixed digital ledger. The ledger allows anyone who is plugged in to view the transaction history.
Cryptocurrencies are low-risk investments if you buy and hold.
Correct Answer: False
Many factors may make cryptocurrencies and crypto assets risky investments (e.g., cyberattacks and hacking, their speculative nature, liquidity, security, and volatility). Additionally, many crypto assets and online crypto trading platforms aren’t regulated in Canada. Securities regulators are working with operators of platforms to ensure they comply with applicable securities laws.
I can trade crypto assets through a registered dealer in Canada.
Correct Answer: True
You can trade crypto assets in Canada using registered cryptocurrency platforms. Cryptocurrency trading is legal in Canada, and you should note that profits are taxable as capital gains, or as income if you are classified as a day trader. You can check a platform’s registration by visiting the Canadian Securities Administrators’ website or by contacting a Canadian securities regulator to inquire.
Non-fungible Tokens (NFTs) are a crypto asset that people can collect and trade.
Correct Answer: True
An NFT is a digital asset that often represents real-world objects like art, music, and videos. NFTs are bought and sold online, frequently with cryptocurrency, and they are generally encoded with the same underlying software as many cryptocurrencies. “Non-fungible” means that it’s unique and can’t be replaced with something else.
There is no difference between cryptocurrencies and crypto assets, these terms are interchangeable.
Correct Answer: False
The term “crypto assets” is generally used to reference a broad range of digital assets with a variety of properties and/or uses. The term “cryptocurrencies" refers to a specific type of crypto asset, which is generally designed to be used as a medium of exchange, similar to the way we use fiat currencies (a.k.a. government-issued money) to purchase goods and services.
Not all crypto assets are securities.
Correct Answer: True
Not all crypto assets are securities or are subject to securities laws. That said, the regulatory treatment of a particular crypto asset will depend on whether it is a security or derivative. Despite the fact that a crypto asset may not be classified as a security or derivative, the way they are bought, sold and/or traded can be subject to securities laws.
Bitcoin will retain its value and rise in price over time because there’s a limited supply.
Correct Answer: False
You could lose some or all of the money you used to purchase any crypto asset or cryptocurrency, including Bitcoin. Like many investments or financial assets, there is no guarantee that crypto assets or cryptocurrencies will retain their value or rise in price.
Cryptocurrencies can be used for payments.
Correct Answer: True
Some cryptocurrencies can be used for payments; however, it can be difficult, expensive, and/or slow. Their price volatility may also be a factor in an individual or business accepting cryptocurrency as a form of payment.
Crypto asset scams are among the most popular types of online investment scams.
Correct Answer: True
As the popularity and price of cryptocurrencies rise, so do the scams associated with these digital assets. The volatile, online, and often unregulated nature of crypto assets makes it easy for people to fall victim to fraud in a number of ways. For example, fraudsters use the anonymity of the internet to attempt to avoid detection by regulators or law enforcement.
Nice work. You have a good understanding of crypto assets! Crypto assets are a constantly evolving type of investment, so there is always more to know. Visit InvestRight.org to learn more about crypto assets, investment fraud, and other important investor education information with these resources:
Good job. You understand the basics of crypto assets! Because crypto assets are an ever-changing type of investment, there is always more to know. Check out InvestRight’s crypto asset resources to learn more about these digital investments:
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