The resources are aimed toward helping advisors in discussing CRM2-required reports with clients
The Investment Funds Institute of Canada has released a three-part series of Advisor Insights, its advisor-focused information bulletin, which aims to help readers ensure that their clients get the most of the reports they’ll receive under CRM2.
“Improving investor knowledge is a major objective of CRM2, and one that the industry fully supports,” said IFIC's president and CEO, Paul C. Bourque, Q.C. “Our new three-part Advisor Insights series will strengthen the quality of advisors' conversations with investors about their investment returns and fees.”
The first part, titled An Opportunity to Strengthen Your Relationships with Clients, shares guiding principles for advisors’ conversations. They include putting themselves in clients’ shoes, serving as financial coaches, and asking probing questions to assess clients’ understanding and determine what information they lack.
The second installment, Answering Your Clients' Questions about the Performance of their Investments, clarifies the difference between a personal rate of return and a target rate of return. Strengths and weaknesses of different benchmarks are compared, and the difference between performance numbers in fund facts and the CRM2 report is explained.
The third, Answering Your Clients' Questions about Services and Fees, describes the services performed by dealers and fund managers and explains the discrepancy between MERs of any funds the client has invested in and the total cost figure in the new report. It also points out that the new report does not itemize all fees the client may be charged.
“CRM2 is about much more than transparency and disclosure,” said Bourque. “We expect it will positively impact the relationships of dealers and advisors with their clients.”
Related stories:
IFIC speaks out on regulatory reforms
CRM2 will ‘shake out’ misconduct, says Steadyhand president
“Improving investor knowledge is a major objective of CRM2, and one that the industry fully supports,” said IFIC's president and CEO, Paul C. Bourque, Q.C. “Our new three-part Advisor Insights series will strengthen the quality of advisors' conversations with investors about their investment returns and fees.”
The first part, titled An Opportunity to Strengthen Your Relationships with Clients, shares guiding principles for advisors’ conversations. They include putting themselves in clients’ shoes, serving as financial coaches, and asking probing questions to assess clients’ understanding and determine what information they lack.
The second installment, Answering Your Clients' Questions about the Performance of their Investments, clarifies the difference between a personal rate of return and a target rate of return. Strengths and weaknesses of different benchmarks are compared, and the difference between performance numbers in fund facts and the CRM2 report is explained.
The third, Answering Your Clients' Questions about Services and Fees, describes the services performed by dealers and fund managers and explains the discrepancy between MERs of any funds the client has invested in and the total cost figure in the new report. It also points out that the new report does not itemize all fees the client may be charged.
“CRM2 is about much more than transparency and disclosure,” said Bourque. “We expect it will positively impact the relationships of dealers and advisors with their clients.”
Related stories:
IFIC speaks out on regulatory reforms
CRM2 will ‘shake out’ misconduct, says Steadyhand president
