CRM2 will ‘shake out’ misconduct, says Steadyhand president

CRM2 will ‘shake out’ misconduct, says Steadyhand president

CRM2 will ‘shake out’ misconduct, says Steadyhand president Steadyhand President and Co-Founder Tom Bradley has slammed wealth management firms that keep their clients in the dark about the costs they pay for investment services, saying that the practice is “more common than it should be.” As an example, he cited a recent regulatory decision involving CIBC.

“Recently it was reported that CIBC has been fined and will pay compensation of $73 million for double charging its clients,” Bradley wrote in a recent commentary. He went on to explain that on top of the account fee clients were paying, they were unfairly charged commissions on products that were included in their portfolios. The violation was self-reported and, he said, “may have been discovered as the bank readies itself for CRM2 reporting.”

“[T]hese dishonest activities by the banks (TD Bank and Scotiabank previously settled with the OSC for similar violations) make my blood boil,” he wrote. “You can’t tell me that advisors and branch managers didn’t know this was going on.”

He also expressed frustration over the fact that the notice CIBC sent to clients made the bank look good for “reviewing [their] processes on an on-going basis” when, in his view, “[t]here should be consequences for the people involved.”

“CRM2 will shake out this kind of behavior,” he said. “It isn’t perfect (it doesn’t include the management fees on funds and other products), but it will allow investors to see what they’re paying their providers.”

Related stories:
CIBC to pay clients $73 million in compensation
Regulator campaigns for investor fee alertness
  • WealthAdvisor 2016-11-16 9:09:01 AM
    I do not see any relationship here with CRM2 and if Mr. Bradley is referring obliquely to the Investor Cost report, that report in my opinion is less than useless. Unlike Mr. Bradley's own reporting for his funds, CRM2 does not allow percentages along with dollar costs. As a result, this report is not going to make investors more engaged; certainly not more informed as it does not present any meaningful information. Dollars? In relation to what?

    In many aspects CRM2 is badly flawed and regulators need to do a much better job. Number 1. Has any regulator asked for any input from advisors?
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