BMO will pay back almost $50 million to clients who were overcharged on their mutual funds and investment accounts. The settlement was worked out by the Ontario Securities Commission, which said BMO “self-reported” the problem and there was no evidence of dishonest conduct by BMO.

But something fishy is going on when the OSC has already settled similar voluntary cases with CIBC, which agreed to repay $73 million to more than 80,000 customers, three Bank of Nova Scotia divisions, three subsidiaries of TD Bank, and with mutual fund giant CI Funds, which repaid $156 million to 360,000 clients.

Banks behaving badly

All eyes are on fees in the wake of CRM2, the latest regulations that are supposed to provide investors with greater transparency about the cost and performance of their accounts. It makes you wonder if the big banks and investment firms, who have been overcharging Canadian investors for decades, are avoiding greater scrutiny by discovering these “accidental” problems and making regulators believe they are serious about protecting their clients.

BMO stick-up

But let’s be honest, until bigger steps are taken, i.e. banning embedded commissions and imposing a best interest standard of care, Canadian investors will continue to be at the mercy of a system designed to screw them over.

This Week’s Recap:

On Monday I looked at budgeting and how best to save for large purchases.

On Wednesday Marie listed five things that might be missing from your retirement budget.

And on Friday I enthusiastically posted my 2017 financial goals.

Over on the ModernAdvisor blog I shared some of the best financial advice I ever got.

Weekend Reading:

In honour of a new Star Wars film opening this weekend, CBC’s Peter Armstrong writes a fun piece on the economic argument against blowing up the Death Star:

“The costs of destroying the Death Star would be staggering, requiring an enormous, galactic-wide bailout to the tune of 15-20 per cent of the economy.”

Big Cajun Man Alan Whitton shares some Christmas advice on how to deal with Uncle Frank the financial “expert”.

No one knows who owns nearly half of Vancouver’s priciest homes.

Would-be buyers are finding it ever more difficult to get a mortgage from mainstream financial institutions. Is greater regulation driving them into the shadows?

Carl Richards on a retirement plan with less golf but more satisfaction:

Globe and Mail columnist and Millennial advocate Rob Carrick did an Ask Me Anything interview over on Reddit.

Here are 3 solutions for would-be buyers dismayed by Canada’s hot housing market.

According to a new study, the cost of child care is outpacing inflation in Canada’s largest cities.

Episode 2 of the Canadian Couch Potato podcast is out. Dan talks with fee-only advisor Sandi Martin about the difference between financial planning and investment management:

“If you’re asking which ETFs you should use before you’ve got a savings plan and clear investment objectives, you’re getting the process backwards.”

Michael James wonders why investor advocates focus on how advisors are paid instead of just lobbying for lower cost mutual funds.

Ben Carlson on how the 1973-74 bear market changed how people judge investment performance.

An investor took his broker’s advice to sell two stocks, which subsequently rose sharply in value. He writes John Heinzl to ask for advice on how to cope with the loss.

Chalten Fee-Only Advisors have a terrific blog and this article looks at two crucial success factors that often elude investors.

“Most investors, both amateur and professional, fall victim to psychological pitfalls and stray from their discipline precisely at the moment they need it most, usually around market peaks and troughs.”

There are tax issues if you earn dividends inside your tax free savings account. Dan Bortolotti explains the penalty for holding dividend stocks in a TFSA.

Investor advocate group FAIR Canada shares its 2017 wish list. Sounds good to me!

Ed Rempel offers up some case studies on delaying CPP and OAS until 70.

My Own Advisor Mark Seed shares some year-end tax tips and financial housekeeping.

Empire shares plummeted 17 percent after a 70 percent drop in earnings last quarter. The interim CEO laughably blamed poor sales on its loyalty parter Air Miles for ticking off customers.

Finally, grab a second cup of coffee and check out these 75 charts every Canadian should watch in 2017.

Have a great weekend, everyone!


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