Final phase of CRM2 sets new rules for what financial institutions disclose to investors


The final phase of CRM2, known as Client Relationship Model Phase 2, being implemented today means that Canadian investors will receive two new annual reports meant to provide more transparency from financial institutions handling their investment.

CRM2 is an initiative of the Canadian Securities Administrators that has been in consultation since 2014. With this final phase implemented, investors will receive two reports called Charges and Other Compensation, and Investment Performance. The former will let investors know exactly how much they paid for the operation of their account, and the compensation directly paid to their financial institution. The investment performance report will include the market value of all cash and investments at the beginning of the 12-month reporting period and the market value of deposits to the account.

CRM2 applies to all forms of investment, and investors are expected to receive these annual reports by early 2017. “Most retail investors don’t know how much they’re paying for the advice and services they’re receiving,” Neil Gross, executive director of FAIR Canada, told the Vancouver Sun. “And if that information is presented to them and is drawn to their attention, there may very well be a significant number who are surprised and unhappy about it.”

For more, the Canadian Foundation for Advancement of Investor Rights made a helpful video series:

Jessica Galang

Jessica Galang

Freelance tech writer. Former BetaKit News Editor.

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