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Fee Transparency: Breaking Down Costs

When it comes to investment fees, a little knowledge can be very dangerous. I have been running a fee-for-service business for the last fifteen years which has provided me with extensive experience in this area. I have been an advocate for full fee transparency for many years.

The latest phase of CRM2 (Client Relationship Model 2) took effect in January 2017 and includes enhanced fee disclosures regarding fees paid directly to advisors, on client statements.

CRM2’s Purpose

CRM2’s main premise is to enhance client communications and disclose the portion of the fees investors pay to their advisor. While CRM2 only deals with the portion of the fees directed to advisors, there are other fees/charges that are part of the holdings that you should be aware of. The portion of the MER not paid to the advisor, trading costs, bond spreads, foreign exchange costs or the embedded MER for ETFs held in mutual funds are not disclosed. They are over and above what has been disclosed. These all add up.

This link is a BNN video with Rob Carrick from the Globe and Mail on the anger from investors on fee disclosure.

The gold standard is 100% full transparency of everything. Plain and simple.

That means all fees and charges in dollar terms right on your statement (no exceptions). That also means full transparency of the actual assets you own in your own plan. That is not units in some fund, pool or ETF that you hold units of. You likely are unaware of what you actually own in most of these products or what they have taken out in fees.

If you would like us to review all the fees to help you understand exactly what you are actually paying we would be glad to do it with no charge or obligation. Only then can you compare real value.

Full transparency creates trust and means no surprises.

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