Questrade's Mutual Fund Maximizer is a service that reimburses mutual fund trailer
fees directly to our clients. The trailer fee, or trailing commission, is one of
the fees associated with mutual funds and it can be as much as 1% (or more!) of
the value of your investments.
The purpose of trailer fees is to pay your financial advisor or broker for ongoing
management services they provide you and your investments. However, the funds pay
the same trailer fee to your broker no matter how much or little advice they provide.
In addition, the trailer fee is an ongoing expense. As your portfolio grows, so
do the fees.
Most mutual funds pay the trailer fee directly to the brokerage where your funds
are invested. You will never see the trailer fee deducted from your account because
it is typically embedded in the fund's MER (Management Expense Ratio). The average
trailer fee is about 1%. The specifics of the fees charged by a fund are detailed
in the charges and fees section of the simplified prospectus.
With Mutual Fund Maximizer, you get back your trailer fees.
Questrade's Mutual Fund Maximizer will put a stop to the unlimited fees charged
by mutual fund companies by reimbursing trailer fees back to you.
What is it worth to you?
All investors with mutual funds are charged trailer fees by the fund company. With
Mutual Fund Maximizer™, the processing fee is $29.95 per month with a minimum
of three months. At the close of every quarter, Questrade assesses your total trailer
rebates, subtracts the total processing fee for the quarter, and then rebates the
remainder into your account. This processing fee is never charged to your account,
so there is no additional payment if your rebate is less than the quarterly threshold.
Your account will therefore never be charged a fee for participating in the Mutual
Fund Maximizer service.
The threshold to begin receiving your trailer fee rebates is about CAD $36,000 in
mutual funds. This assumes an average trailer fee rebate of 1%.
For example, if you’ve got $100,000 invested in mutual funds, with a 1% trailer
fee, your annual total in trailers could be as much as $1000 — every year. After
deducting the monthly processing fee, out of the $1000, you would be reimbursed
$640.60. And because Mutual Fund Maximizer's processing fee is capped ($29.95 per
month), the more you have invested in mutual funds, the higher your rebate.
Not all funds are created equal! The majority of funds have a trailer
fee of about 1%. Some pay above 1%, but others pay little or no trailer fees.
Assuming a 1% trailer fee, when you hold about $36,000 of mutual funds, your account
will surpass the monthly processing fee threshold and you will receive rebates.
From the moment you first purchase mutual funds at Questrade, we begin tracking
your trailer fees. At the close of every quarter, Questrade assesses your total
trailer rebates, subtracts the monthly processing fee, and then rebates the remainder
into your account.
|
Quarter |
Time period |
Rebate payment date |
|
1st |
January 1st to March 31st |
May 1st |
|
2nd |
April 1st to June 30th |
August 1st |
|
3rd |
July 1st to September 30th |
November 1st |
|
4th |
October 1st to December 31st |
February 1st |
Maximize your RRSP contributions. If you have a registered account,
trailer fee rebates have no impact on your regular contribution limit. You can contribute
to your limit and we’ll maximize it with the rebate.
Maximize your returns: Trailer fee rebates are deposited into your
account as cash, and cannot be used as part of a re-investment program. However,
if you own mutual funds that issue dividends, you can register your mutual fund
as part of our dividend re-investment program (DRiP).
Tracking your trailer fee rebate
Track your trailer fees right in myQuestrade. When reviewing your anticipated trailer
fees, there are a few important details to keep in mind:
- Details of each fund, including the anticipated and actual rebates, are published
in the Mutual Funds area of our client portal. This area of the website is updated
daily and/or when new information is published by the fund company.
- Rebate estimates are provided by the fund company. The fund company can change the
trailer fee without any prior notice.
- Trailer fee rebates are paid to eligible clients when we have received the monies
from the fund company.
- The fund company may be negligent or delayed in disbursing trailer fees. If this
is the case, Questrade will pursue full and timely payment. When and if a fund company
disburses a tardy trailer fee, your account will be credited the full eligible amount.