Credential introduces fee-based product for mutual fund advisors

January 26, 2016 Investment Executive

OnPoint Fee-Based Account, which has been rolled out over the past several weeks, allows advisors at Credential’s credit union partners to charge a set percentage fee

By Rudy Mezzetta

Vancouver-based Credential Financial Inc. has introduced a fee-based product for Mutual Fund Dealers Association of Canada-licensed financial advisors at its credit union partner organizations to offer to their mass affluent clients.

OnPoint Fee-Based Account, which has been rolled out over the past several weeks, allows advisors to charge a set percentage fee and offer clients access to any F-class funds carried by Credential Asset Management, the firm’s mutual fund dealer. The OnPoint Fee-Based Account is non-discretionary.

“We firmly believe in the whole philosophy of fee-based [advice] and the merits of that broader value proposition,” says Kim Thompson, senior vice president of advisory services at Credential, which provides wealth-management products and services to Canadian credit unions. “We wanted to make sure that our advisors had the ability to provide the services that investors are, if not demanding today, coming to expect.”

The OnPoint Fee-Based Account is intended for investors with a minimum of $100,000 of investible assets. Says Thompson: “The complexity of clients’ financial situation would then be supportive of a fee-based approach to managing their financial affairs.”

St Catharines, Ont.-based Meridian Credit Union, the largest co-operative financial institution in Ontario, is the first Credential partner firm to sign on to offer the account. Five other Credential credit union partners are currently on schedule to adopt the account for its advisors as well, Thompson says.

Ultimately, Credential anticipates that at least 20% of assets under administration on its MFDA platform will be fee-based over the next three years.

“The whole industry is in such a transition, and the acceleration of [growth in] fee-based is quite significant,” Thompson says.

Credential has partnerships with approximately 200 credit union organizations and 1,500 advisors on both the MFDA and the Investment Industry Regulatory Organization of Canada platforms.

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