A CRM2 checklist for dealers

IFIC has made a CRM2 checklist to help dealers prepare for rules coming into effect in 2015.

The checklist summarizes the new language that must appear on client statements starting this year.

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Some elements must be satisfied by prescribed language and which can be addressed through plain language. Where plain language is permitted, the checklist offers suggested wording that satisfies or exceeds CRM2 rules and regulators’ expectations.

The purpose of CRM2 is to ensure all investors receive timely, easy-to-understand information about the cost and performance of their investments. IFIC says the mutual funds industry supports CRM2 because the changes will allow investors to make better-informed decisions about their investments.

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CRM2 is being phased in over three years. In 2014, dealers were required to disclose pre-trade costs and provide a general description of benchmarks. As of December 2015, dealers will be required to report on all investments – client name and nominee-held positions – and several changes will be required to account statements. In 2017, investors will receive a report showing, in dollar amounts, the money paid to dealers on the investor’s account during 2016. A separate report will tell investors how well their investments have performed in dollar terms and percentage terms over several time periods ending in 2016. Investors will receive these reports annually.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.