A person walks past a TD Bank sign in the financial district in Toronto on Tuesday, Sept. 20, 2022
Some Canadian investors may qualify for compensation under the TD mutual fund class-action settlement. The Ontario Superior Court of Justice approved a settlement exceeding $70 million. Eligible investors now have limited time left to submit a claim and receive a payout.
What the TD Mutual Fund Class-Action Is About
The class-action lawsuit targeted TD Asset Management, specifically TD Mutual Funds. The case focused on fees known as trailing commissions.
Trailing commissions are fees paid to mutual fund dealers. These fees are meant to compensate dealers for providing investment advice.
The lawsuit alleged that some TD mutual fund investors paid these fees without receiving any advice. This issue mainly affected investors who used discount brokers.
Why Trailing Commissions Were Challenged
According to Siskinds Law Firm, which led the case, trailing commissions reduce the value of investments. These fees are justified only when advice is provided.
Discount brokers generally do not offer financial advice. They mainly provide online platforms to buy and sell investment products.
The claim argued that investors using discount brokers received no value for the trailing commissions charged to them.
How Discount Brokers Work
Discount brokers allow investors to choose and purchase mutual funds independently. They do not guide investment decisions or financial planning.
This differs from working with a financial advisor or portfolio manager. Advisors provide personalized advice and ongoing support.
Because no advice was given, the lawsuit alleged the fees were inappropriate.
Examples of Discount Brokers Named
Siskinds identified several discount brokerage platforms in the case. These include:
- TD Direct Investing
- BMO InvestorLine
- RBC Direct Investing
- CIBC Investor’s Edge
- Scotia iTRADE
- National Bank Direct Brokerage
These platforms are commonly offered by major Canadian banks.
TD’s Response to the Settlement
TD Bank Group declined to comment directly on the allegations. The bank referred inquiries to the settlement agreement.
The agreement states the settlement is not an admission of wrongdoing. TD Asset Management continues to deny the claims.
Who May Be Eligible for Compensation
You may qualify under the TD mutual fund class-action settlement if:
- You held TD Mutual Fund investments.
- The investments were held at any time up to September 11, 2024.
- The funds were purchased through a discount broker.
Investors working with financial advisors are generally not included.
How to Confirm Your Eligibility
Eligibility depends on how the mutual fund was purchased.
“If no advice was provided and the purchase was through a discount broker, that qualifies,” said lawyer Gigi Pao of Siskinds LLP.
To qualify, claimants must submit supporting documents. These verify the investment product and trailing commissions paid.
How Much Money Could You Receive
Payout amounts will vary. Several factors influence the final compensation. These include:
- Investment size
- Length of ownership
- Total trailing commissions charged
Each approved claimant will receive a proportionate share of the settlement fund. The minimum payout is $25.
How the Final Amount Is Calculated
The settlement administrator will review all approved claims.
They will calculate trailing commissions paid by each claimant. Based on this data, the total fund will be divided proportionally.
Final payout amounts will only be known after all claims are processed.
Deadline to Submit a Claim
Eligible investors must file a claim before December 20, 2025.
Claims must be submitted through the official settlement administrator’s website. Missing the deadline means losing eligibility for compensation.
What Investors Should Do Now
Review your investment records carefully. Confirm whether TD mutual funds were purchased through a discount broker.
Gather required documents early. Submit your claim well before the deadline.The TD mutual fund class-action settlement offers a chance for affected investors to recover part of their losses. Acting now ensures your eligibility is protected.
