Independent mutual fund companies usually distribute their products through a network of brokers and personal financial planners. Fund sponsors and delivery channels are converging as financial institutions compete to attract investors. Sponsors are entering into strategic alliances with their own competitors, while many fund companies are private-labeling their products for other fund companies. For example, Mackenzie, AGF and Sceptre are now advising certain funds for The Mutual Group, Great West Life and Investors Group respectively. Proprietary channels, such as banks and insurance companies, are now providing third-party funds to increase the choice of products they offer their clients.
Larger banks can utilize their extensive networks of retail branches to distribute their funds.
Independent brokers and advisors are being forced to change their fee schedules as their competitors offer more options and lower fees. These direct channels are vying to control distribution by offering no-load or substantially discounted funds. National Policy No. 39 addresses issues such as investment restrictions and practices, borrowing powers, seed capital, matters requiring fund holder approval, the custody and subcustody of fund assets, fund holder commingling of assets, net asset valuation procedures, distribution and advertising. Specific provisions of National Policy No. 39 prohibit securities lending by mutual funds and mandate that the trustee and custodian of fund assets be a Canadian bank or trust company.