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Can I get my money back?
Old 08-18-2007, 01:08 PM   #1
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Can I get my money back?

On Thursday I sold some units in a mutual fund I had here in Canada held thru Scotia Direct. I was unable to do the trade online so I called it in. I specifically asked if there was any kind of fee and the rep said that if it was held for less than 90 days that there should be no fee but that she could not tell for sure on her screen. I had the fund for nearly 6 months so there should not have been a fee. I see now that it has settled they charged me a 3% fee... I went to the mutual fund companies website and I see that they do charge a 3% fee on any fund that is sold within 180 days of purchase (I owned the fund for about 160 days unfortunately). It worked out to about a $350 fee on the sale. I sent the bank an angry email disputing the charge, but I doubt it will go anywhere. Doesn't help my mood any that the fund dropped 7% on the day either.....

I should also point out that nowhere on the bank's site does it list an early termination fee for this fund.
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Old 08-18-2007, 02:15 PM   #2
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Since most MF companies tape all CS calls now, you may have an out by refering them to the recorded conversation. What does the prospectus say? If it says 180 days, you will probably be held to that standard since that document seems to cover a lot of bases.
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Old 08-18-2007, 02:21 PM   #3
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Don't know if this helps, but I know fund clearinghouses in the US (such as Fidelity) often have 2 sets of early redemption fees. The first set is that imposed by the custodian (like fidelity or Scotia Direct) that may be 3% if sold w/in 90 days. The second set of early redemption fees would be imposed by the mutual fund company (like Janus or Muhlenkamp), say 1% fee if sold w/in 180 days of purchase.

Sounds like your custodian Scotia Direct didn't charge you their early redemption fee but the mutual fund company did charge you the early redemption fee that they impose. I'm sure it was disclosed in your prospectus (assuming US SEC-like disclosure rules exist in Canada).

Unfortunately this is probably $350 paid to the school of investing.
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Old 08-19-2007, 10:42 PM   #4
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Originally Posted by accountingsucks View Post
I should also point out that nowhere on the bank's site does it list an early termination fee for this fund.
Any fee charged by the mutual fund company is independent of and has nothing to do with Scotia Direct's fees. The bank rep correctly said there was no "Scotia Direct" fee but they have no way of knowing if there would be a mutual fund company fee or not. It is not their job. They are only the order taker on your behalf. You have to do your own due diligence on that aspect first.

You brought this up on another forum and were told the same thing.
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Old 08-20-2007, 03:45 AM   #5
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The only way to know for sure is to try to undo the trade... But I suspect that you will eat the back-end load.
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