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Three letters that can make a big difference to your portfolio

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Dear Nancy,

I've heard many references to CRM but don't really know what it is. Can you please explain it?


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Dear Tracy,

CRM is the acronym for Client Relationship Model. It is a series of investment industry requirements initiated by the Canadian Securities Administrators that aim to increase transparency and enhance the relationship a client has with their adviser.

Firms have already implemented the first phase of CRM. It is now a required practise that will help increase the amount of information a client receives for things such as opening a new account and how it will be operated, along with details on the products and services a client can expect to receive. There are also higher standards for advisers to use in assessing the suitability of investments for their clients.

Firms are now focused on CRM 2, which is being introduced in three stages between 2014 and 2016. The first stage was implemented in July 2014 and focused on greater transparency of transaction charges and fees. For example, advisers are now required to disclose, among other things, the applicable commission charge before accepting an instruction to enter a trade. This requirement applies to all securities. The second phase, happening in July 2015, will include requirements for enhanced account statements, and finally in July 2016, clients will receive an annual report of charges, compensation, and performance.

CRM requirements ensure an industry standard that is to be followed by all advisers so that the investor knows what they are paying for. Clients will be more educated and know what they can expect to receive, how their advisers are being compensated and ultimately become a more informed investor.

Knowing what you are paying is as important as knowing what you own.

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Nancy Woods is an associate portfolio manager and investment adviser with RBC Dominion Securities Inc. Visit her website or send an email request to You can send your questions to as well.

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About the Author

Nancy Woods, CIM, FCSI, is an associate portfolio manager and investment adviser with RBC Dominion Securities Inc. More


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