New standards will help investors better understand their investments and make informed choices

For Canadian investors, the stakes have never been higher. Fewer than ever will have employer-sponsored pensions to rely on in the 20 to 30 years they’re likely to live after their last paycheque. With interest rates perilously low, equity market participation is essential – even as heightened volatility and economic uncertainty make it more uncomfortable.

Our ultimate goals are to improve understanding, build financial confidence and enhance decision-making – because we know that informed investors make better decisions...
— Joanne De Laurentiis is president and CEO of the Investment Funds Institute of Canada

Alongside these profound shifts, Canada’s funds industry has grown exponentially, innovating to provide a wealth of valuable services and products. But as offerings have expanded, so has complexity, along with the challenges of communicating with investors with a broad spectrum of individualized needs.

Over the next year, the funds industry will hit the proverbial reset button, introducing changes designed to deliver greater clarity, ease of access and transparency in this new world.

These efforts are part of an industry-wide initiative known as Client Relationship Model - Stage 2 (CRM2). The industry has been hard at work setting the stage for a new disclosure framework, paving the way for a redesign of communications standards throughout the investment industry, from dealer firms and mutual fund companies to portfolio managers.

“It is all about enhancing the ability of Canadians to make good investment decisions,” says securities lawyer Rebecca Cowdery, a partner at Borden Ladner Gervais LLP and former Ontario Securities Commission regulator. “The whole concept behind this is giving investors more information in a way that helps them understand what is happening in their investment accounts.”

The aim is ambitious, and seen throughout the industry as crucial: to collectively advance understanding and help investors get the most out of their relationships with advisers.

Consistency across sectors and companies is a primary goal, says Ms. Cowdery. “Everyone will be giving performance information to their clients in the same way. It’s building on information the industry has always provided investors, in a format that will make it easier for them to understand their results and compare performance of different investments. Additional information will also help them clearly understand the cost they pay for advisory and distribution services.”

“The industry recognized early on that, for the benefit of investors, we needed to address these changes co-operatively,” says Joanne De Laurentiis, president and CEO of the Investment Funds Institute of Canada (IFIC). In fact, IFIC’s CRM2 initiatives leveraged the contributions of the greatest number of industry volunteers contributing to a single issue in the organization’s 53-year history.

One outcome of this unprecedented collaboration is two model reports released in the spring of 2015. If all dealers follow this approach, the resulting consistency – along with clarity of language and design – will make it easier for all mutual fund investors to understand the breadth of distribution and advisory services they receive, what they pay and whether they are on track to meet their financial goals.

“Together, we’re working to provide consistent, clear information that will help investors develop their savings habits, decide on savings objectives, choose products to meet those objectives, and have more meaningful conversations with their advisers,” says Ms. De Laurentiis.

Informed conversations that strengthen investor-adviser relationships are well worth it, given that investors who work with advisers are proven to do measurably better than those who don’t. More information is available at

A 2015 Pollara poll commissioned by IFIC found that 94 per cent of those surveyed agreed that they trust their advisers to give them sound advice, and nine out of 10 agreed that they obtain better returns than they would if investing on their own. But as CRM2 changes will highlight fees paid, it will become even more important for advisers to articulate their value as they help investors manage costs.

“The financial well-being of Canadians is a core value of our industry,” says Ms. De Laurentiis. “Advisers work hard every day to instill effective savings and investment habits through one-on-one conversations with clients. We support these efforts by creating clear, plain-language materials.”

IFIC has also created a cross-sector task force to develop a consistent body of smart practices that will help advisers better prepare clients for the possible loss of cognitive skills associated with an aging society.
“Our ultimate goals are to improve understanding, build financial confidence and enhance decision-making – because we know that informed investors make better decisions and are more disciplined about staying the course during uncertain economic times,” stresses Ms. De Laurentiis.

The Investment Funds Institute of Canada (IFIC) is the voice of Canada’s investment funds industry. IFIC brings together 150 organizations, including fund managers and distributors, to foster a strong, stable investment sector where investors can realize their financial goals. The organization is proud to have served Canada’s mutual funds industry and its investors for 50 years.

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