CRM2 - What is this exactly?

Dawn Luhning |

I learned in this business long ago that it's made up of alphabet soup. CRM2, KYC, TFSA, RRSP, RRIF - there are a number of abbreviations. 

I'd like to focus today on CRM2, or Client Relationship Model, Phase 2. What's that you might ask? Well...

By now, you've probably received your annual investment statement/s for 2016. They were delayed here at Desjardins because they were manually created to abide by new rules under CRM2. Those being disclosure of compensation and fees paid to the dealer (DFSI Inc.) and to me. It also introduced new rate of return valuations among other things. Here is a link to a one-page summary from RBC on the exact details.

Fees and compensation are not new in this industry; as a financial advisor, I am paid for the services I provide my clients. In particular, when you purchase an investment with me for your portfolio, I'm paid a commission. 

There has been a bit of talk and written articles about how much fees are paid to advisors and in particular I point your attention to a new commercial from Questrade that hits hard at advisors in our industry. You can take a look here.


Over the last two years, because of the movement in our industry to be more transparent, I am more closely discussing fees with my clients. What's been interesting is the reaction I'm getting after explaining to them how I'm paid. Overall, the reaction is not out of the norm and has not caused me or my clients any additional stress. If anything, I've been blessed with many of these clients saying they understand that I should be getting paid to help them with their financial futures. I had one of my mutual fund reps in my office last week and he summed it up perfectly:

"CRM2 has kind of been like Y2K". It's not to say that it's not important because it is but...all the hype has been greeted with more quiet calm than turbulence. 

I've had a number of calls from clients about their 2016 annual statements and I welcome those calls. What I'm grateful for is the understanding that as their financial advisor, and being that this is my career, I deserve to be paid for my time with them, to help them grow their financial portfolios.

Have a great week everyone. Spring may finally be here!