Mutual funds used to be sold in Canada with high up front commissions. Later, most non-bank dealers switched to a deferred sales charge (DSC), with no deductions up front but high fees charged to clients who cashed in or transferred elsewhere in the first seven years.
Annual trailing commissions, paid to financial salespeople by fund manufacturers, were supposed to subsidize ongoing service. But few clients knew of this arrangement and many didn't get the service they deserved.
Shamefully, it took Canadian securities regulators 20 years to outlaw this conflicted system. It may hurt young people trying to break in as financial advisors -- at first anyway -- but it's a huge step forward for fund investors.
So, let's celebrate the demise of a 20th century #innovation to compensate fund sellers and not bewail the ongoing service commissions that didn't help clients prosper.