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Dale Jackson

Your Personal Investor


A new survey suggests investors will remain in the dark on fees and performance long after the solar eclipse has passed.

J.D. Powers asked full-service investors how they are being impacted by CRM2 – an investment industry effort to make advisory fees and performance more transparent. The investment industry has been kicking the fuller disclosure idea around for over a decade in response to criticism that Canadians pay the highest fees in the developed world.

Last July was the deadline for advisory firms to – among other things – express fees in percentages as well as dollars, and provide more details on performance.

The industry was given one year to implement the final phase of CRM2, but somehow the message didn’t get through. According to J.D. Power, only 23 per cent of investment advisory clients noticed any change during the past year. Thirty-six per cent said their financial advisors did not clearly communicate the reasons for the performance of their investments, and 41 per cent said their advisor did not explain fees.

That means many advisors aren’t taking CRM2 seriously. It also means most are actually doing their regulatory duty. Many advisors exceeded the disclosure rules long before they came along. 

Off the record, some advisors will tell you the only thing CRM2 has accomplished is creating more time-consuming paperwork – time that could be spent explaining fees and performance.