In a significant legal development, Canadians can now claim a portion of an $8.5 million class-action settlement with TD Asset Management Inc. following a ruling by the Ontario Superior Court of Justice. The settlement, announced by Kalloghlian Myers LLP on Monday, resolves claims related to the improper payment of trailing commissions to mutual fund dealers, which allegedly caused diminished returns for investors. This landmark agreement offers a potential financial relief to many mutual fund investors who were impacted.
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Background of the Settlement
Trailing commissions, often referred to as trailer fees, are payments made to mutual fund dealers for providing ongoing advice to investors. These fees, originally intended for full-service brokers, were also paid to discount brokers in the past, sparking legal concerns. According to the law firm, the class action argued that such payments were “improper” and led to a decrease in the value of mutual fund units held by investors.
The settlement does not imply any admission of wrongdoing by TD Asset Management Inc., but is described as a “compromise between the parties of their disputed positions,” providing an efficient resolution for both sides.
Who Is Eligible for the Settlement?
This settlement applies to individuals who held or currently hold units in TD mutual fund trusts as of September 11, 2024. Importantly, the settlement excludes those who held their TD mutual funds through discount brokers, as they are part of a separate class action settlement.
How to Claim the Settlement
If you still own units in a TD mutual fund, no claim is necessary to receive compensation. The settlement will be distributed automatically, with a portion of the net settlement amount deposited into each eligible TD mutual fund trust. Affected investors should monitor their bank accounts for any incoming payments.
For individuals who no longer hold TD mutual fund units, claims must be submitted by August 28, 2025. If you qualify, be sure to file your claim within the stipulated time frame to ensure compensation.
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Discount Broker Settlement
Canadians who held TD mutual funds through discount brokers have not been left out. A separate $70.5 million class-action settlement was reached last October for those investors. Discount brokers, such as BMO InvestorLine, TD Direct Investing, RBC Direct Investing, CIBC Investor’s Edge, Scotia iTRADE, and National Bank Direct Brokerage, are included in this distinct settlement.
This large-scale settlement is a key moment for investors affected by trailing commission practices and provides an avenue for compensation. Make sure you understand your eligibility and act promptly to claim your share.
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