New lower and streamlined fees

New lower and streamlined fees

The average Canadian continues to overpay for investment advice, whether it is the average mutual fund MER of 2.20% in Canada or the average hedge fund with more than 4% in fees for a 10% annual return. The impact is under-performance over the long-term.

We’re pleased to announce the following changes to AFINA’s fee structure:

  • Our lowest management fee has been reduced to 0.50% (from 0.65%).
  • Our highest management fee has been decreased to 1.25% (from 1.85%).
  • We have moved to a tiered-fee structure based on asset size, regardless of product. Family assets will be grouped together to achieve savings and lower fees.
  • These changes are effective immediately for new clients and will take effect on April 15, 2019 for existing clients.

The new fee schedule is as follows:

Assets Under $20 milllion Assets Over $20 milllion
1.25% on the first $1 million 0.50% on the first $20 million
1.00% on the next $1 million 0.45% on the next $20 million
0.75% on the next $2 million 0.40% on the next $20 million
0.50% on amounts over $4 million 0.35% on amounts over $60 million

 

For example, Dr. Chan and her family have grouped multiple accounts including RRSPs, TFSAs, an RESP and corporate accounts to qualify for a family discount. The combined market value of the accounts is $1,500,000. The fee is calculated as follows:

  • On the first $1 million, the fee is 1.25%, which equals $12,500
  • On the remaining $500,000, the fee is 1.00%, which equals $5,000

The total annual management fee of $17,500 (plus HST) is charged to each of the grouped accounts on a pro-rata basis.

In comparison, a typical Canadian mutual fund would cost $33,000 per annum in fees. Therefore, total family savings equals $13,225 (including HST). Furthermore, AFINA’s management fees in non-registered accounts are tax-deductible.