The Investment Funds Institute of Canada (IFIC), which frequently struggles to meet the needs of a broad membership base, is facing yet another controversy. Ned Goodman, head of Dynamic Mutual Funds and one of the founders of the Canadian fund industry, pulled his firm out of the trade group in early June, charging that IFIC is too dominated by the no-load groups run by the countrys top banks.
IFIC is a tool of the big banks and trust companies, Goodman says. And it does little to support independents and distributors. Toronto-based Dynamic had been the 15th largest member of the group.
Prior to their decision to jump, executives at Dynamic had taken issue with what they allege were misleading ads run by Toronto-based Canada Trusts fund group claiming zero commissions on transactions.
Goodman says the claim isnt true. He says the mission of IFIC should be to keep firms honest in their advertising. The trade group did not resolve Goodmans complaint to his satisfaction.
Dynamics withdrawal from the group might be symptomatic of a larger problem, according to sources in the Canadian investment industry. When IFIC was formed in 1962 to represent the growing Canadian mutual fund industry, it had a fairly homogeneous membership. However, that original group of fund companies has grown to include more than 100 packagers, distributors, dealers, and fund units of banks and trusts.
In order to make itself more important, the IFIC decided that there was power in numbers. Now they have such a diverse membership that little in the way of consensus can ever be reached, says a vice president of one mid-sized fund group in Toronto.
IFIC President Thomas Hockin says the group continues to meet the needs of a diverse industry. It is to be hoped that when things calm down, Dynamic will be back in the fold, he says.