How Financial Advisors Get Paid – Ottawa, Ontario

Fees:

Some financial advisors charge an all-inclusive flat fee, typically in the range of 1 to 1.5% based on the size of the portfolio. Others may operate on a fee-for-service, either by the hour or based on the specific services they provide. All funds recommended by Potvin Financial & Retirement Services, whether mutual funds or segregated funds, charge an on-going management fee (MER) by the mutual fund company. The advisor is compensated a portion of the applicable fee. The fees generally range between 2% – 3%, depending on the type of funds and benefits associated with the contracts.

Deferred Sales Charge (DSC):

It is important to understand that if you select a DSC option to invest, you do not pay a fee at the time of purchase. The fee is administered by the fund company and they compensate the dealer advisor a commission.

If you choose to redeem funds within a specific period of time – usually five to seven years, you will be charged a redemption fee by the company at that time.

Front-end Sales Charge:

It is important to understand that if you select the front end sales charge option to buy units or shares of funds, you will be charged a fee at the time of purchase, deducted from the total investment amount.

Unlike the DSC option, if you redeem shares or units after your initial purchase, no redemption fee will be charged by the fund company.

Low Load Sales Charge:

It is important to understand that if you select the low load sales charge option to invest, you do not pay a fee at the time of purchase. The fee is administered by the fund company and they compensate the dealer advisor a commission.

If you choose to redeem funds within a specific time frame – usually less than three years, then you will be charged a redemption fee by the company.

Insurance commissions:

Commissions are paid by the various insurance companies directly to the advisor when new insurance business is placed.