Some Canadians may be entitled to part of a class-action settlement with a division of TD Bank totalling over $70 million that was approved by the Ontario Superior Court of Justice, with just a few days left to file a claim.
The class-action lawsuit was brought against TD Asset Management, and more specifically TD Mutual Funds, and argued that some investors were charged unfair fees or commissions for handling their investments — specifically, what are called trailing commissions.
The legal team that brought forward the case against TD Asset Management, Siskinds Law Firm, said in a statement that trailing commissions “are intended to compensate mutual fund dealers for investment advice they provide to investors.”
Mutual fund dealers may be people who manage a person’s finances and help them build investment portfolios with products like mutual funds, stocks and other products. There are also what are known as “discount brokers,” which Siskinds says mostly operate online and “are not allowed to provide investment advice.”
“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,” Siskinds said in a written statement.
A discount broker may be less involved with a person’s finance or individual goals compared with a financial advisor or portfolio manager, and act more as a gateway to investments like mutual funds.
“Discount brokers allow for you to go and say, ‘I want to buy this particular mutual fund,’ and then you can buy it through them, but they’re not the ones providing you any advice on which things to purchase,” says Gigi Pao, a lawyer with Siskinds LLP.
“The class action itself considered the payment of these trailing commissions inappropriate due to people not getting the benefit of the advice that it said they were supposed to be getting.”
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Examples of discount brokers, according to Siskinds, include BMO InvestorLine, TD Direct Investing, RBC Direct Investing, CIBC Investor’s Edge, Scotia iTRADE and National Bank Direct Brokerage.
Global News requested a comment from TD Asset Management on the matter.
“Please refer to the settlement agreement,” a spokesperson from TD Bank Group said in an emailed response.
The settlement agreement, which identifies TD Asset Management as the “Defendant,” says: “The Settlement Agreement is not an admission of liability, wrongdoing, or fault on the part of the Defendant, which has denied, and continues to deny, the allegations against it.”
Any person who at one point held investment products with TD Mutual Funds at any time prior to and including Sept. 11, 2024, may be entitled to a payout if it was provided by a discount broker.
Oftentimes, Pao says, it’s the discount offerings from some of the big banks that are most at fault.
“Typically, the big banks are the ones who are offering the discount brokerage service,” Pao says.
“If you’re working with someone who’s a financial advisor, that’s the opposite, so as long as it’s not someone who is giving you financial advice and it’s through a discount broker, that’s what qualifies.”
To qualify for compensation, you must submit a claim and all required supporting documentation, which will verify the investment product and how much compensation could be included.
Since the claim amount varies depending on the size of a person’s investment, the length of time the product was owned and the amount of trailing commission charged, it isn’t clear what each may receive.
“It’s really hard to say right now because depending on how much someone held or how much trailing commissions they paid and what they claim for that will be distributed amongst everyone who is filing their claim and that number won’t be known until the administrator has received everyone’s claims,” Pao says.
“If out of the percentage of everyone who has submitted a claim, your number is larger, then you would have a slightly bigger percentage of the net settlement funds. But at this time, I can’t really give a number due to this calculation that needs to happen.”
According to the settlement documents, each authorized claimant will be eligible to receive “a proportionate share” of the settlement amount, with a minimum payout of $25 for each qualified claimant.
The administrator will calculate the amount of trailing commissions each person paid to a discount broker based on the information provided, and then will determine how much of a share of the total settlement they may be entitled to.
To submit a claim, visit the administrator settlement claims website by the deadline of Dec. 20, 2025.
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