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CRM3.Clarity. Value. Trust.
A new cost transparency standard took effect on January 1, 2026. Before clients receive their first updated statements in early January 2027, advisors have a valuable window to guide them - to set expectations, reinforce trust, and bring clarity to the role costs play in long-term outcomes.
Client–Advisor Relationship Model – Phase 3 (CRM3) is an industrywide regulatory update that gives Canadians a clearer and more complete picture of their investment costs. Implemented through Total Cost Reporting (TCR), it shows:
Same charges |
Greater transparency |
CRM3 does not add new fees. Instead, existing costs are itemized more thoroughly so clients can easily see what they already pay and how those costs contribute to their overall investment experience.
| CLARITY | VALUE | TRUST |
|---|---|---|
| Help clients understand exactly what they pay and why. | Greater cost transparency helps anchor discussions about disciplined investing and long-term outcomes that advice enables. | Being proactive before the first TCR reports arrive demonstrates leadership and reinforces confidence. |
Be ready to break down the enhanced cost information simply and intuitive.
Use the added transparency to highlight the full value clients receive - beyond products alone.
Prioritize clients who will benefit from early touchpoints and integrate CRM3 into upcoming reviews to reduce confusion before the first TCR reports arrive.
Let clients know they’ll receive their first TCR statements in early January 2027.
CRM3 does not introduce new fees; it simply lays out existing costs more clearly.
Reassure clients that your role is to help them interpret the new data and stay aligned with longterm goals — a strong moment to deepen engagement and uncover new planning needs.
Point out the key additions and what each fee supports.
Early conversations reduce uncertainty and open doors for deeper planning.
| REPORT | WHAT’S NEW UNDER CRM3 |
|---|---|
| ANNUAL REPORT ON CHARGES AND COMPENSATION (ARCC) | Percentage and dollar amount disclosure of embedded costs charged inside the fund and reflected in its price and returns |
| INVESTMENT PERFORMANCE REPORT* | Calculation of client’s personal rate of return |
| *The update to the Investment Performance Report applies only to guaranteed investment funds, since for other investment products, the calculation of the client’s personal rate of return was already part of CRM2. | |
Under Total Cost Reporting (TCR), clients receive a comprehensive view of both the embedded costs within their investment funds and the direct charges applied to their accounts.
| TYPE OF COST | DISCLOSURE METHOD | HOW IT APPEARS IN ARCC (WHAT CLIENTS SEE) |
|---|---|---|
| EMBEDDED COSTS | Per-fund basis | Total Fund Expenses (in dollars) for each fund held during the year |
| DIRECT ACCOUNT CHARGES | Per-account basis (separate from fund pricing) |
Fee-based accounts: Advisory/portfolio fees
Commission-based accounts: Trade commissions and transaction charges |
| COMPONENT | WHAT IT COVERS | EXAMPLES OF COSTS |
|---|---|---|
| Management Expense Ratio (MER) | Professional portfolio management and related services | Management fees, administrative expenses, trailing commissions, taxes |
| Trading Expense Ratio (TER) | Costs of buying and selling securities inside the fund | Brokerage commissions, transaction fees |
| MER + TER = FER (Fund Expense Ratio) | ||
Fees fund professional portfolio management and day-to-day operations that support long-term investing:
Some clients may pay closer attention to cost differences between investment products - including options such as lower-cost index-based solutions like ETFs, as well as actively managed funds that typically involve a broader range of investment decisions and associated expenses.
This does not change product features or suitability criteria. Rather, TCR may prompt richer conversations about how cost, value, risk, and long-term strategy fit together holistically.
For segregated funds, the basic cost of insurance is considered an embedded cost. Rider costs, however, may be treated as embedded or applied as direct charges, depending on the insurer.
TCR applies to widely held, prospectus qualified investment products such as:
Newly established funds may be exempt if expense data is not available year-round
The Personal Rate of Return (PRR) is a dollarweighted rate of return that measures how portfolio performed based on clients’ own investing activity.
Unlike timeweighted returns—which isolate pure fund or market performance—the PRR reflects:
PRR reflects clients’ personal experience. It shows how their decisions, timing, and costs—along with market performance—shaped their results.
Clients should compare their PRR to the target return required to reach their financial goals—since, unlike benchmarks or fund performance, the PRR accounts for clients’ own cash flows, fees, and real investment experience.
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