If you're like many investors, you may not know exactly what you're paying for your financial investments or how your investment dealers are compensated for their services. Fortunately, there are new regulations being rolled out over a three-year period designed to bring more transparency to the industry.
Called the Client Relationship Model — Phase 2 or CRM2, the disclosure and information it brings will make you a smarter investor.
"The final set of CRM2 changes (effective as of July 15, 2016) will result in investors seeing two new annual reports," explains Joe Snyder, product management analyst at Tangerine. “The first report will show investors the charges and investment dealer compensation for their investments in dollars, not just percentages. The second will be an annual report summarizing account performance activity during the year and since opening your account."
It's important to remember that most firms provide information on a calendar-year basis, so most investors will start getting their reports in early 2017.
"These new changes are a step in the right direction as they will allow investors to be more informed about what they're paying for the services they're receiving," says Snyder.
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