Canadian investors believe they are paying too much in fees to those who manage their money, and many find the complex fee structures of the investment industry confusing, according to a new survey by Decima Research.

The survey, commissioned by Stratos Wealth Management, a division of MD Management Limited, reveals a troubling picture of frustration and dissatisfaction among Canadian investors when it comes to understanding and receiving value for the fees they pay for investment products and services.

The survey also reveals that while many feel the investment industry lacks clarity and transparency in disclosing the fees investors pay, many have little or no idea what they pay, leaving a large proportion of investors in the dark when it comes to their personal financial management.

“It’s clear that investors are dissatisfied with the fees they pay – and those who aren’t should be, given the negative effect high fees have on investment returns,” says Sandy Wilson, chief operating officer for CMA Holdings, the parent company of both MD Management and Stratos Wealth Management. “Canadians are looking for clear, competitive and transparent pricing – with no hidden fees.”

The results are based on a telephone survey of 376 Canadian investors ages 25 to 64 in August. Statistically, Stratos says the survey’s results may be considered accurate to within plus or minus 3.1%, 19 times out of 20.

According to the survey:

– 48% of Canadian investors believe they are paying too much in fees, compared with just 40% who are comfortable with the fees they pay. A further 12% don’t know one way or the other. Of those who offered an opinion, therefore, 55% believe they are paying too much.

– A surprising number of investors – 43% – believe that the investment industry lacks clarity and transparency in disclosing the fees investors pay.

– 44% have only “a vague idea” or “no idea” of the fees they pay on the management, purchase and sale of investments by their fund managers, securities dealers or investment advisors.

– Of those who do know what they are paying, 43% report paying 3% or more of their total investment portfolio in fees. Of that number, 6% claim they pay more than 10% in fees. This contrasts with data from Investor Economics, which show that, on average, Canadians pay between 2.2% and 2.8% of their portfolios in fees, says Stratos.

– 67% agree that their advisor or investment company has taken the time to provide information on fees. Still, almost one-third (31%) disagree, notwithstanding regulatory efforts to improve disclosure of fees.