GICs have a hidden commission
Never assume that an investment comes without fees. GIC commissions are often hidden, and many investors do not even realize they are paying them. If you use a broker, a commission is paid to the broker and is included in the cost of your GIC. These upfront commissions are paid because the broker does not make any on-going money (aka”trailing commissions”) after the initial purchase. Be aware that if your broker charges annual fee based on the value of your portfolio, then they should not be collecting it on a GIC, or else it’s considered double-dipping.
- Fees on financial products can be transparent or hidden, but they are always in there somewhere.
- GICs commissions are so well hidden that very few investors even know they exist.
- Advisors deserve to be paid, but you shouldn’t have to pay them twice.
“If you’ve ever wondered why you get better rates when you buy GICs directly from the issuer, rather than through an advisor or brokerage, that’s because direct-sold GICs don’t include that commission to the middleman.”
(abstract 34OWYT6U3WIPWQVX5J25ER838OII9Y 3JZQSN0I3QBMOTE98J7WSVDIKD1FGG A3PDOZ6I8PE9ZK)(authorquote 3HJ1EVZS2OKGAN90EXV41668VSRR3U 3NGI5ARFTT61BRD043IYX2NGKU71P7 A34MRQ1OP87XC6)(keypoints 3XEIP58NL0O6SILGUKTHJV2O4V1ZL9 3MTMREQS4VJNPON1C8PM0XOFHLHWAM A1U2SV39L6OHWQ)