Canadians could cash in on $45-million RBC class-action

Eligible Canadians who have invested in RBC or PH&N Mutual Funds could soon claim part of a class-action settlement.

On Tuesday, Toronto-based law firm Siskinds LLP shared a notice announcing that a class-action settlement of $45 million had been reached with RBC Global Asset Management Inc. and RBC Investor Services Trust.

The proposed settlement still needs to be approved by the Ontario Superior Court of Justice on Sept. 8.

The allegations

According to Siskinds, trailer commissions (also known as trailer fees) are payments made on mutual funds to compensate fund dealers for providing investment advice to investors. However, the lawsuit alleges that these fees were also paid to discount brokers who typically operate online and aren't allowed to provide investment advice.

Discount brokers operate online and include BMO InvestorLine, TD Direct Investing, RBC Direct Investing, CIBC Investor's Edge, Scotia iTRADE, and National Bank Direct Brokerage.

"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," reads the class action website.

Are you eligible?

You could file a claim if you held or currently hold units of an RBC or PH&N mutual trust fund through a discount broker anytime before the end of the trial. Customers are eligible if they live in Canada or elsewhere.

How much could you receive?

The lawsuit seeks monetary damages on behalf of affected customers, but the amount they could receive hasn't been specified yet. Out of the proposed $45-million settlement, $12.6 million will go towards legal fees, taxes on fees and disbursements.

What should you do next?

If you think you're eligible, make sure to register on the class-action website and provide your contact details to receive the latest updates.