Are you eligible in TD mutual fund class-action settlement? What to know

Some Canadians may be entitled to a payout from TD after a class-action settlement totaling over $70 million was approved by the Ontario Superior Court of Justice.

Some Canadians may be entitled to part of a class-action settlement with a division of TD Bank totalling over $70 million that was approved by the Ontario Superior Court of Justice, with just a few days left to file a claim.

The class-action lawsuit was brought against TD Asset Management, and more specifically TD Mutual Funds, and argued that some investors were charged unfair fees or commissions for handling their investments — specifically, what are called trailing commissions.

The legal team that brought forward the case against TD Asset Management, Siskinds Law Firm, said in a statement that trailing commissions “are intended to compensate mutual fund dealers for investment advice they provide to investors.”

Mutual fund dealers may be people who manage a person’s finances and help them build investment portfolios with products like mutual funds, stocks and other products. There are also what are known as “discount brokers,” which Siskinds says mostly operate online and “are not allowed to provide investment advice.”

“It is alleged by the plaintiffs that, since no advice is provided to investors who purchase mutual funds through discount brokers, these investors receive no value for the trailing commissions that reduce the value of their mutual fund investments,” Siskinds said in a written statement.

A discount broker may be less involved with a person’s finance or individual goals compared with a financial advisor or portfolio manager, and act more as a gateway to investments like mutual funds.

“Discount brokers allow for you to go and say, ‘I want to buy this particular mutual fund,’ and then you can buy it through them, but they’re not the ones providing you any advice on which things to purchase,” says Gigi Pao, a lawyer with Siskinds LLP.

“The class action itself considered the payment of these trailing commissions inappropriate due to people not getting the benefit of the advice that it said they were supposed to be getting.”