The Investment Funds Institute of Canada has created two model reports to help dealers and advisors meet the disclosure requirements that will come into force in 2016 with Phase 3 of the Client Relationship Model 2 (CRM2).
IFIC released the two sample reports on April 14. One deals with investment performance, and is meant to help investors understand whether they are on track to meet their financial goals. It shows the investor’s personal rate of return in both dollars and percentages and details changes in market value as well as contributions to and withdrawals from the account. The second report explains the various charges that have been incurred, and discloses in dollars and cents how much compensation dealers and advisors have received on the investor's account.
IFIC says that both of the model reports encourage investors to meet with their advisors regularly, and to ask questions about their products and services that will improve their understanding and help them make better financial decisions. IFIC has also published a companion guide to help dealers use the model reports. In particular, the companion guide clarifies issues involving referral fees, the schedule of costs, and notes that dealers should be sensitive to the visual needs of seniors when designing their reports.
“For most investors, these two reports will mark a sea change in the way information about their investments is presented,” comments IFIC president and CEO Joanne De Laurentiis. “IFIC’s model reports are designed to meet both the letter and the spirit of the rules. We have taken the raw templates prepared by the regulators and further simplified the language, created easy-to-follow layouts, and added plain language explanations of many of the terms.”