A primer on the Client Relationship Model (CRM2)

• Charges, fees and other costs must be disclosed verbally or in writing prior to any transaction.
• The advisor or dealer must explain to investors what a benchmark is and how it can be used to assess their portfolio.

Phase 2
What it involves: Enhanced client account statements
When: Beginning July 2015

• Investors may request quarterly or monthly statements that disclose the original cost; the market value and opening balance of each fund; which fund carries a deferred service charge; transaction details during the reporting period; and whether an investor protection fund covers an investment.

Phase 3
What it involves: Account and fee transparency
When: Beginning July 2016

• Investors must receive an annual report on investment performance that includes a summary of their account activity over the past year and since they opened it.
• The summaries must include the market value of all assets at the beginning and end of the reporting period; the market value of deposits, withdrawals and transfers through the reporting period; annual and cumulative change in market value; and a moneyweighted rate of return for the reporting period.
• Investors must also receive a report on annual charges and compensation that details, in dollars, all operating, transaction and related charges paid to the advisor or dealer. Compensation from third parties made to the dealer must be disclosed.

Read the full story: CRM2, actions abroad put fee transparency in financial services under the microscope