Providing greater transparency
The “Client Relationship Model” is designed to provide investors with greater transparency on the costs and performance of their investments.
With phase two of this initiative, called “CRM2,” a new annual performance report was introduced at most Canadian investment firms in 2017.
The new annual performance report uses a different way to calculate your rate of return compared to the traditional “time-weighted rate of return” used by most of the financial industry.
It’s called a “money-weighted rate of return,” and it takes into account your contributions and withdrawals throughout the year to give you more insight into your personal rate of return.
The following video explains the difference between these two ways to calculate your rate of return – and why both are helpful.