Also popular: Where is the client outreach on CRM?

Also popular: Where is the client outreach on CRM?

Also popular: Where is the client outreach on CRM? The latest evolution of Canadian customer relationship management rules, the implementation of the so-called CRM2 regs, went ahead July 15th. Since then there has been little mention in the mainstream media of this momentous shift. Apart from some articles in the trade press, few average Canadians likely have any idea of what’s happening.

The lack of publicity has some advisors wondering whether something more could have been done to explain to clients the new information they will receive.

"The major problem with CRM2 is that there is no consumer awareness program being conducted by the securities administrators to inform investors of the changes," Arthur Charles Salzer tells WP in the latest issue of the magazine. "There is no effective investor outreach program from the regulators to help consumers understand the changes that will occur and explain why advisors are moving to a MWRR."

So-called money weighted rate of return, or MWRR, is the new common method used to calculate the performance of an investment fund. This is a different method than so-called time weighted rate of return, or TWRR. Relatively few outside the investment industry could be expected to understand the differences between the two. The worry is that many in the general population won’t understand what is being presented to them.  

Any thoughts on the roll-out of CRM2? 
5 Comments
  • CowTown 2014-07-22 11:39:25 AM
    I agree, and when I bring it up, people are like, we've known and trusted you for 17 years, why all this now? I dunno, but I suspect there is a core of whiners who didn't listen to their advisers, bought high, sold to buy concrete equities and Mortgage backed crap, got a DSC fee because they changed their strategy from long term to short term, then complained to the regulators/head offices, said they weren't told. Head offices pay a complaint fee to keep 'em happy, the good advisors continue doing what they're told and the bad advisors go sell cell phone plans and hemp investments (remember ginseng?)
    Post a reply
  • EJ 2014-07-22 11:59:25 AM
    I work at an IIROC member firm, and I didn't even know that CRM2 requires firms to show MWRR rather than TWRR. There's so much being thrown at us all at once that it's virtually impossible to know what exactly is encompassed in CRM2. If they can't even effectively communicate it with industry participants, it's no wonder they haven't effectively communicate it with the public. It has been my understanding that the time-weighted rate of return is the preferred industry standard as it is not sensitive to contributions or withdrawals. I have no idea why this standard has been changed to money weighted. It makes no sense to me. Explain it to those of us in the industry first before regulators make this compulsory. And where was the Canadian Securities Institute and the Financial Planners Standards Organization in all this? I am members of these organizations, I pay a higher and higher fee to be a member each year and when critical issues like this arise, I don't recall either of these organizations taking a stand or position on the most fair and proper method of reporting returns.
    Post a reply
  • douglas e swanson 2014-07-22 1:51:37 PM
    Advisors alone communicate to clients. Clients don't have time to read, let alone choose sources to read, study and select funds from the thousands available. Their only hope is a good ,trusted advisor, to guide and protect them from mechanical marketing procures. Also to get answers when questions arise, based on the timely decisions made in the past.
    Post a reply