Insight June 2014

Research on Multi-series Assets and Sales Trends by Investor Economics For the better part of the last 18 years, the progress of the various letter-series was uneven. The adoption of institutional and special purpose series (such as T-series), spread quickly. But the growth of “unbundled” series, such as F- and some HNW-series, remained largely uninspiring. Their concept of eliminating the embedded distributor compensation component from the funds’ management fees, which demanded a re-arrangement of the economic model on the part of intermediated advisors, appeared to be an innovation whose time had not yet come. There are indications that this time has now come. Will the Future be all about the letter F? The shift to unbundled fee-based programs—which use unbundled fund fee series—is already well underway in the full-service brokerage channel. Now Canadian regulators are adding further impetus to the unbundled fee-based pricing models in the other advice channels, as they contemplate a wide array of fee-related initiatives—from enhanced disclosure of the advice-givers fees in the CRM-II to the outright demise of the embedded compensation. Monitoring the multi-series fund landscape is becoming more important than ever, as advisors and distributors refit their economic paradigms to align with the new market and regulatory realities. The current issue of Insight does just that by helping the readers navigate the Canadian fund alphabet soup, which includes series F-, T- (for “tax”), D- (for the ebanking and discount platform), high net worth (HNW) and Advisor-series of no-load bank-sponsored funds. It is a must-read for industry participants and observers alike.