A poll revealed that CRM2 implementation has improved investors’ knowledge of their investments
There is a significant change seen in investors' confidence and knowledge following the implementation of the Client Relationship Model Phase 2 (CRM2), which enables them to access the performance of their investments through the issuance of fee disclosure reports.
A research commissioned by the British Columbia Securities Commission (BCSC) revealed that 52% of investors who had limited investment knowledge at the outset of the study reported an increase in their general understanding of fees after receiving their CRM2 reports.
BCSC executive director Peter Brady said the initial research on CRM2 reflects the change in investors' behaviour and knowledge in their investments.
"We want more investors to feel empowered and have important conversations with their advisors about their financial futures," he said.
The study also found out that 16% of investors started engaging with their advisors. Meanwhile, 25% claimed to have made changes to their fees or mix of investment products after learning about their CRM2 reports. Additionally, 11% declared that they have changed their firm or advisor upon receiving the disclosure reports.
Brady also mentioned that the CRM2 issuance creates an opportunity for advisors and clients to strengthen their relationships.
The study showed that trust to financial advisors remained high amongst investors who reported receiving their CRM2 statements. Meanwhile, trust in advisors slumped by 10% amongst those who did not receive their CRM2 reports, leaving them unsatisfied with their advisors.
"Advisors should take the opportunity to help their clients be more aware of the new reports and help them understand the impact of fees on investments. Having a greater understanding of fees and investment performance benefits both parties," he said
For more of Wealth Professional's latest industry news, click here.
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Does the investment industry have an uneasy relationship with disclosure?
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A research commissioned by the British Columbia Securities Commission (BCSC) revealed that 52% of investors who had limited investment knowledge at the outset of the study reported an increase in their general understanding of fees after receiving their CRM2 reports.
BCSC executive director Peter Brady said the initial research on CRM2 reflects the change in investors' behaviour and knowledge in their investments.
"We want more investors to feel empowered and have important conversations with their advisors about their financial futures," he said.
The study also found out that 16% of investors started engaging with their advisors. Meanwhile, 25% claimed to have made changes to their fees or mix of investment products after learning about their CRM2 reports. Additionally, 11% declared that they have changed their firm or advisor upon receiving the disclosure reports.
Brady also mentioned that the CRM2 issuance creates an opportunity for advisors and clients to strengthen their relationships.
The study showed that trust to financial advisors remained high amongst investors who reported receiving their CRM2 statements. Meanwhile, trust in advisors slumped by 10% amongst those who did not receive their CRM2 reports, leaving them unsatisfied with their advisors.
"Advisors should take the opportunity to help their clients be more aware of the new reports and help them understand the impact of fees on investments. Having a greater understanding of fees and investment performance benefits both parties," he said
For more of Wealth Professional's latest industry news, click here.
Related stories:
Does the investment industry have an uneasy relationship with disclosure?
Why certain advisors are at risk
