Canadian online brokers face class action lawsuit over commissionsBy The IJ Staff | January 20 2020 12:30PM
Toronto law firm, Koskie Minsky LLP announced late last week that it has commenced a class proceeding concerning the payment of trailing commissions to Canadian online trading brokers. The law firm says the class action is being brought on behalf of all persons who purchased mutual funds through a Canadian discount brokerage.
Trailing commissions are paid to brokers by companies that manage and operate mutual funds. The fees are paid out of the value of an investor’s investments.
“Improper investment commissions whittle away the retirement savings of ordinary Canadians. The practices of collecting trailing commissions for no reason must stop,” says Koskie Minsky partner, Kirk Baert.
In a statement the law firm adds “it is alleged that trailing commissions are designed to compensate the broker for advice and services that the broker has provided to the investment client,” they write. “However, discount brokers cannot and do not provide advice or services to investors. It is alleged that these commissions are inappropriate, and unlawful, and that these funds should be returned to investors.”