TD reaches $70M class-action settlement on broker commissions, law firm says

A person walks past a TD Bank sign in the financial district in Toronto on Tuesday, Sept. 20, 2022. THE CANADIAN PRESS/Alex Lupul

Siskinds LLP says a $70.25 million class-action settlement has been reached with TD Asset Management over commissions paid to discount brokers.

The law firm says the class action members alleged that since discount brokers aren't allowed to provide investment advice, investors receive no value for the trailing commissions they pay to such brokers.

It says trailing commissions paid on mutual funds are meant to compensate mutual fund dealers for investment advice they provide to investors.

Siskinds says it has filed proposed class actions against several mutual fund managers that have discount brokers, which along with TD Direct Investing, also includes RBC Direct Investing, BMO InvestorLine, CIBC Investor’s Edge, Scotia iTRADE and National Bank Direct Brokerage.

The proposed settlement with TD covers anyone who held units of a TD mutual fund trust through a discount broker on Sept. 11, 2024 or earlier.

TD did not immediately respond to a request for comment on the settlement, which is still subject to approval by the Ontario Superior Court of Justice.

This report by The Canadian Press was first published Oct. 9, 2024.