Investor Presentaiton
As with other areas of the financial products sector, industry concentration is relatively high.
In December 2005, the ten biggest firms offering mutual funds in Canada managed nearly
78% of the total assets held in Canadian funds². There are 210 mutual funds grouped into
24 families in Québec. The province has 411 "brokerage advisory firms" employing over
28,000 sales reps who are registered in the securities field and authorized to work in this
sector. About 21,000 of these specialize exclusively in mutual funds³.
A number of factors explain the growing popularity of mutual funds, including the aging
population, the increased number of well-to-do investors, and the greater number of actual
funds available.
2.2. The major players
The mutual funds industry is mainly composed of promoters (managers) and distributors.
Banks and credit unions play the roles of both promoter and distributor. Consumers can buy
mutual fund shares from financial advisors, mutual fund sales reps, lending institutions,
financial planners, and securities brokers. Mutual funds involve several parties at different
operational levels. Below is a list of the main players.
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The fiduciary holds the securities that belong to the fund on behalf of the shareholders.
The management company (or manager) often acts as a funds promoter. It sets up
one or several funds, administers them, and markets them.
The custodian is the fiduciary bank or company appointed by the management
company to safeguard the securities held in the fund.
The investment advisor is the professional financial manager appointed by the
management company to direct the investments. The company often takes on the
investment advisory role itself, in which case it makes all of the investment decisions,
constantly monitors economic conditions, and modifies the investment allocation
accordingly.
The principal distributor coordinates the sale of the mutual fund shares to investors,
either directly or through the network of registered securities dealers.
2
3
INVESTMENT FUNDS INSTITUTE OF CANADA, Table showing the relative position of members, December
2005. [online] [https://statistics/ificmembers.ca/English/reports/2005/12/public/relativepos.xls]
(Consulted on March 1, 2006)
AUTORITÉ DES MARCHÉS FINANCIERS, Mémoire préparé dans le cadre des travaux préliminaires (brief
drafted during the preliminary work), p. 29
Consultation paper
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