The final stages of CRM2 – scheduled to be fully implemented by mid-July 2016 – could present a challenge for some advisors
Three industry insiders give their views on this contentious issue.
Marta Stiteler (Owner/financial planner, Pillar Retirement Group):
“We’ve heard a lot about this for a number of years, so we’ve had time to prepare. This is something everyone should have been doing, and recent reports show that most people are. From my perspective, I’ve been very clear with clients in talking to them about the cost of investment. Clients understand that nothing is free, and those who don’t want to pay might go to roboadvisors. One really good thing about CRM2 is that a lot of fund companies are giving us the ability to lower the cost to clients. For instance, for the last few years, I’ve been talking to clients about fee-based
[advice].”
Johnathan Pollock (Account manager/financial securities advisor, Capesky Insurance and Wealth Management):
“Our business is always growing and adapting to provide better service to clients. This is particularly evident when focusing on compliance. Although the added documentation and time-spend can appear a nuisance, this is in the best interests of clients. It improves clarity and empowers clients to know more about their financial plans and the work we do. It also gives advisors the opportunity to reflect on our practices and focus on serving clients at an optimum level. A few advisors will likely leave the business, and that’s OK. It will weed out part-time and less-than-professional advisors who may not be the best fit for this career in the first place.”
Steve Meehan (President and CEO, Evolution Wealth Advisors):
“I don’t think it will be overly difficult as long as advisors embrace it and be proactive, not reactive. Advisors need to talk [to their clients] about what CRM2 is and what they’re doing to deal with it. I think [advisors should] take a look at the options out there and embrace things such as investment counsellors to help reduce clients’ fees, F-class units or things priced more effectively – but most important, be upfront and transparent with the client. One of the unfortunate things about CRM2 is that it talks about the advisor being the bad guy, but I feel the opposite. The advisor is the most important part of the equation.”
Eyeing the finish line
By the middle of next year, CRM2 will have reached full implementation. Advisors are – or at least should be – preparing to switch their annual reporting processes, as demanded by the latest regulatory changes. Naturally, some industry members are digging in their heels. They’re arguing the changes are too much of a hassle to enact. But many advisors counter, these processes should have been in place long ago. Not only has the industry received ample notice of the changes, they say, but also many are common-sense practices a majority of advisors are already following.
Marta Stiteler (Owner/financial planner, Pillar Retirement Group):
“We’ve heard a lot about this for a number of years, so we’ve had time to prepare. This is something everyone should have been doing, and recent reports show that most people are. From my perspective, I’ve been very clear with clients in talking to them about the cost of investment. Clients understand that nothing is free, and those who don’t want to pay might go to roboadvisors. One really good thing about CRM2 is that a lot of fund companies are giving us the ability to lower the cost to clients. For instance, for the last few years, I’ve been talking to clients about fee-based
[advice].”
Johnathan Pollock (Account manager/financial securities advisor, Capesky Insurance and Wealth Management): “Our business is always growing and adapting to provide better service to clients. This is particularly evident when focusing on compliance. Although the added documentation and time-spend can appear a nuisance, this is in the best interests of clients. It improves clarity and empowers clients to know more about their financial plans and the work we do. It also gives advisors the opportunity to reflect on our practices and focus on serving clients at an optimum level. A few advisors will likely leave the business, and that’s OK. It will weed out part-time and less-than-professional advisors who may not be the best fit for this career in the first place.”
Steve Meehan (President and CEO, Evolution Wealth Advisors):“I don’t think it will be overly difficult as long as advisors embrace it and be proactive, not reactive. Advisors need to talk [to their clients] about what CRM2 is and what they’re doing to deal with it. I think [advisors should] take a look at the options out there and embrace things such as investment counsellors to help reduce clients’ fees, F-class units or things priced more effectively – but most important, be upfront and transparent with the client. One of the unfortunate things about CRM2 is that it talks about the advisor being the bad guy, but I feel the opposite. The advisor is the most important part of the equation.”
Eyeing the finish line
By the middle of next year, CRM2 will have reached full implementation. Advisors are – or at least should be – preparing to switch their annual reporting processes, as demanded by the latest regulatory changes. Naturally, some industry members are digging in their heels. They’re arguing the changes are too much of a hassle to enact. But many advisors counter, these processes should have been in place long ago. Not only has the industry received ample notice of the changes, they say, but also many are common-sense practices a majority of advisors are already following.
