Warren Buffett has famously said that “Price is what you pay; value is what you get.” As new CRM2 standards compel advisors to disclose more price information to their clients, the Investment Funds Institute of Canada (IFIC) has come out with an informational tool to help advisors communicate the value of their services.
On July 15, the second phase of CRM2 took effect, effectively requiring fund dealers to send two new reports to investors: a report on the performance of the client’s investments and a dollar-amount disclosure of how much a dealer has earned on his client’s account. To aid advisors in explaining these amounts to their clients, the IFIC has released an infographic that shows investors how the mutual fund fees they pay translate into professional services.
“We expect the new reports will encourage more investors to talk to their advisors about the costs and performance of their investments,” said IFIC president and CEO Joanne De Laurentiis. “Our new infographic will help advisors explain the services investors receive for the fees that they pay using an easy-to-understand visual format.”
The infographic spells out the different services that dealers and fund managers perform. Fund manager services include strategy and goal-setting functions, record maintenance, and vetting and monitoring of trading experts. On the other hand, dealer services are broken down into functions such as client risk tolerance and financial needs review, investor guidance for financial planning, and providing online information and account access to customers.
The infographic is currently available in French and English on the IFIC website
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