www.insideHALTON.com | OAKVILLE BEAVER | Thursday, November 5, 2015 | 36 M Mutual fund trailer commissions are a conflict of interest utual fund investors are at a disadvantage because of the way the industry pays commissions. We have more research that says the same old thing. The industry's current method of paying commission is not in the best interest of investors. Canadian securities regulators commissioned a study that shows how vulnerable mutual fund investors are. Two things were learned and both were bad. First, mutual funds that pay ongoing trailer commissions to nancial advisers attract more money than mutual funds that Dollars & Sense Guest Contributor Peter Watson do not pay a trailer commission. This applies to all funds, including the ones that have inferior investment returns. Second, funds that pay trailer commis- sions have investment returns that are often less than competing funds that do not pay a trailer commission. Most Canadians own mutual funds and most mutual funds pay a commission to the nancial salesperson. According to research done by the Canadian Securities Administrators, the majority of mutual fund investors are not aware of commissions that are paid to their investment adviser and do not recall commissions paid ever being explained to them. Mutual funds are often sold with the hidden commission paid at the time of sale. In addition, there are ongoing trailer commissions paid as long as the client continues to own the fund. Paying for ongoing advice is logical; however, often, there is no follow-up advice or any communication. Paying for ongoing advice that might not be received, in my opinion, is an overpayment. All mutual fund fees and commissions are paid by the fund and therefore reduce the return on investment to the client. It is as simple as following the money. When money is paid as an ongoing comsee Research on p.38 The joy of giving Imagine being able to give a gift greater than you ever thoug ught possible. As a Canadian senior you can now support a Canadian charity of your choice by donating a life insurance policy that you no longer need or want and make a charitable contribution larger than you ever imagined. Your Life Insurance, Their Joy Your policy can provide a wonderful gift of joy and substantial tax credit and the elimination of premiums. It makes sense. Canadians are not only able to make a very large donation, they also receive a substantial tax credit. Each year Canadians allow billions of dollars in policies to lapse even though they've paid tens-of-thousands of dollars in premiums. But now, it doesn't have to be this way. This is a wonderful, new opportunity. charity designated as a Public Foundation. Our purpose our mission is to help registered Canadian charities thrive by allowing seniors to turn their unneeded life insurance policies into gifts for a higher purpose. LifePoint Foundation is partnered with other registered Canadian charities and we have millions of dollars available for funding premiums and working together for a better tomorrow. Through LifePoint, your idle policy a true resource is transformed into an ongoing legacy of support for Canadian charities who, in turn, support hospitals, schools, orphanages, churches ... many great causes that make our world a better and more caring place. If you are 70 or older and have a life insurance pol policy with Canada program. And nd we can process your donation before the year-end tax x deadline. We eliminated a $24,000 annual term-to-100 life insurance premium and will use the $198,000 tax credit made in years. How Big Might Your our Gift Be? Call LifePoint and we will answer your our questions ons and give you an indication of the size and investm ment impa pact ct of your gift. Or email your questions to us. For more ore information be sure and visit our website. Tax Credit Once you donate your policy, LifePoint pays 100% of the ongoing premiums and rewards you with a tax credit that, in some cases, allows you to recover a large portion of the premiums you've paid. And after your death, and after the cost of premiums and operational expenses, charities you designate. Imagine ... turning life into legacy Helping Charities Thrive LifePoint Foundation Canada is a registered Canadian Toll free: 877.647.4708 | info@lifepointfoundation.org | www.lifepointfoundation.org