RBC agrees to $45 million mutual fund trailing commissions settlement

RBC has agreed to a $45 million settlement to compensate investors who held its or Phillips, Hager & North (PH&N) mutual funds through online discount brokers between December 28, 2003 and July 25, 2024. The settlement stems from a class action filed by Siskinds LLP, which alleges that RBC deducted trailing commissions—fees meant to pay advisors for ongoing advice—from accounts where no such advice was provided, as discount brokers are order‑execution‑only platforms and are prohibited from giving investment advice under CIRO rules. The lawsuit claims investors received no value for these commissions, and similar actions have been taken against other Canadian fund managers, including a $70 million settlement with TD Asset Management in October 2024. The Canadian Securities Administrators banned trailing commissions to order‑execution‑only dealers in 2022, and the class actions seek to recover amounts paid before that ban. The Ontario Superior Court of Justice will hold an approval hearing on September 8, 2026; if approved, a distribution protocol will be set up, though the net amount to investors will be reduced by legal fees and costs. RBC denies wrongdoing and accepted the settlement to avoid litigation costs. Eligible investors are automatically included, but may object to the settlement terms or legal fees by August 18, 2026. Wealth professionals should inform clients who held RBC or PH&N funds through discount brokers that they may receive a payout.

(Source：Wealth Professional Canada)