Anthony Layton MBA, CIM

Chairman & CEO, Portfolio Manager

Peter Guay MBA, CFA

Portfolio Manager
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Tony's Take: BMO latest to announce excess-fee repayment

December 16, 2016 - 2 comments

This week, BMO Nesbitt Burns Inc. and three other Bank of Montreal investment advisory units joined CIBC, TD Bank, Scotiabank and CI Investments in agreeing to repay over-charged fees to its clients. The Ontario Securities Commission (OSC) announced that BMO will compensate its clients about $50-million in excess fees that were not previously detected. The bank also will contribute $2.1 million to the OSC’s investor protection effort. The various settlements by the five financial institutions total over $320 million. OSC Press Release

As with previous agreements, this is a no-contest settlement. BMO did not admit or deny allegations of misconduct. The OSC said there were “inadequacies in the BMO’s systems of controls and supervision.”

The recent trend in voluntary disclosures to the OSC is not surprising.  Since CRM2 came into effect in July, all large financial institutions have been scrutinizing the fees they are charging, to avoid embarrassment when the new fee disclosure reports are mailed to clients in January 2017. That it required a change in regulation for this to happen is a sad comment on large financial institutions in Canada.

At PWL, we believe full fee disclosure is necessary. Advisors should be required to clearly disclose when they are incented to sell their firm’s own products or securities that their firm has underwritten – regulations that CRM2 is still lacking.

By: Anthony Layton with 2 comments.
  21/12/2016 3:07:45 PM
David McDonald
You two remind me of someone (Bill Onchen -Managing Management Time) who gave me great advice very early on in my career about speaking to a group be it in a public forum or a small management team;
"Tell them what you are going to tell them, tell them and tell them what you told them!"
This is something your good selves and PWL Capital have developed to a fine art over the last 20 years or so as far as the investment climate is concerned. The article below, along with the others preceding and following the American election, are perfect examples of informing us in advance, keeping us informed through the process and then recapping the outcome once the ranting and raving by other financial advisors settled down. Not one of your many clients could be anything but highly impressed with the process you have developed in keeping punters informed.
  18/12/2016 2:57:10 PM
Frank Kimmerle
The reason that I switched to PWL was and is that I felt that you had a steadier hand on the tiller than I would as an independent investor.
If that means that I may have missed on a speculative gain when the market jumps it also means I avoid losses when the market temporarily drops. Continue to take the prudent path seeking calculated risks and preparing for alternate actions when the path is not clear.

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