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Since June 2022, Canadian self-directed brokerages have been prohibited from accepting trailing commissions. That's caused a messy ripple: funds blocked, series switched, rebates appearing, and confusing "sell and rebuy" instructions. This tool cuts through it.
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Since June 1, 2022, self-directed brokerages (Questrade, Wealthsimple Trade, RBC Direct, TD Direct, etc.) have been banned from accepting trailing commissions from mutual fund companies. This changed a lot — but didn't clean everything up cleanly.
Brokerages can no longer receive the embedded 0.5–1% annual trailer fee from Series A funds. They must block purchases of Series A funds or rebate the trailer they receive.
Existing Series A holdings weren't always automatically moved. Some brokerages issued rebates instead of switching. Others blocked new buys but left existing positions. The result: different investors at the same brokerage ended up with different arrangements.
Series A funds still exist and still charge the full MER — the trailer just can't flow to the brokerage anymore. A "rebate" means the brokerage is returning what they received, but you're still paying the same gross MER.
Getting into a D-series, O-series, or equivalent ETF where the trailer is structurally absent. Your MER drops immediately — no rebate needed because the fee was never charged in the first place.
Same fund, wildly different cost. The series letter is the biggest fee lever most investors never look at.
| Series | Where You See It | Typical MER | Trailer Embedded? | Post-Ban Status |
|---|---|---|---|---|
| Series A | Bank branches, many legacy brokerage accounts | 1.8–2.5% | Yes (0.5–1%) | Can't be sold at OEO platforms; must be rebated or blocked |
| Series D | Discount / self-directed brokerages | 1.0–1.5% | Reduced or nil | Available at most OEO platforms — the typical "switch target" |
| Series F | Fee-based advisors (you pay advisory fee separately) | 0.8–1.2% | No | Generally available if your platform supports fee-based accounts |
| Series O | Institutional, large-account platforms | 0.4–0.9% | No | May be available at certain platforms for larger balances |
| ETF equivalent | Any self-directed brokerage (XEQT, VEQT, etc.) | 0.15–0.25% | No | Fully available; commission-free at Questrade (buys) and Wealthsimple Trade |
Example: TD Canadian Equity Fund — Series A MER: ~2.10%. Series D MER: ~1.10%. The same underlying portfolio, the same manager, a full percentage point lower. On a $100,000 position, that's $1,000/year you stop paying simply by moving to the D series.
Not all rebates are equal. Here's what to watch for.
The fund company returns the trailer portion (typically 0.5–1% annualized) directly to your account. This covers the banned amount — but you're still paying the full Series A management fee, and the rebate amount may be slightly less than the embedded trailer.
Your brokerage passes back what they received from the fund company. This should equal the trailer — but it's taxable income in non-registered accounts, and some brokerages have been slow to pay or calculated amounts differently than expected.
Even with a full rebate, you're still in Series A. You're still paying the gross MER that funds Series A's cost structure. A D-series removes the trailer structurally — no rebate needed, cleaner accounting, lower all-in cost.
Rebates received in a non-registered account count as taxable income in the year received. The rebate doesn't offset the capital gains treatment you'd face on the underlying fund — it's just extra income, potentially pushing you into a higher bracket.