What is CRM2?
Answering your questions about new investment industry regulations coming into effect
Providing investors with greater transparency about the cost and performance of their accounts is the driving force behind new industry-wide regulations, known as the Client Relationship Model II (CRM2). Top of mind for investors is how CRM2 will affect them as the regulatory changes are implemented over the coming months.
What is CRM2?
- New industry-wide regulations that improve how the financial industry reports and discloses information to investors
- Changes are now being phased in, with full implementation at RBC Dominion Securities by early 2017. It includes two new reports: (1) account costs and (2) account performance.
- Applies to all investment dealers and advisors in Canada, including: Investment dealers regulated by the Investment Industry Regulatory Organization of Canada (IIROC), such as RBC Dominion Securities
- Firms regulated by the Mutual Fund Dealers Association (MFDA), such as the respective mutual fund distributor of each of the major banks
- Investment counselling firms regulated by provincial securities commissions in Canada
Why is CRM2 being implemented?
- CRM2 is part of a global shift towards increased disclosure and transparency in the investment industry
- To provide investors more details on the fees and performance of their investment accounts
- To improve investors’ ability to assess how they are progressing towards their financial goals
How will CRM2 affect you?
- CRM2 does not change the amount you are paying your investment firm; it only provides more detail to you about your account fees and performance.
- All investors will receive more specific details on the cost and performance of their investments via: Conversations with their investment advisors
- More details on existing account statements and confirmations
- Two new annual reports you will receive starting in 2017 for all investment accounts: An Annual Charges and Compensation Report, showing a detailed list of account fees
- An annual Investment Performance Report to provide details on how the account is performing using a “money-weighted” rate of return