The Investment Funds Institute of Canada (IFIC) today released a guide for mutual fund dealers designed to help the funds industry meet the requirements of the Client Relationship Model (CRM2) reforms.
IFIC’s new guide for mutual fund dealers focuses on the new annual reports on cost and compensation and performance those dealers will have to start producing as part of the CRM2 reforms. IFIC is also releasing revised editions of its model reports, which were first published in 2015. “They emphasize the power of using plain language, simple designs and clear explanations to improve investor understanding,” the guide states.
The new annual reports on investment performance will provide clients with personal rates of return, and “help investors understand whether they are on track to meet their financial goals,” the guide says. At the same time, the new reports on charges and compensation will spell out how much money the client’s dealer has received over the previous year from the client.
The deadline for implementing the new requirements is July 15, and IFIC indicates that it expects investors to start receiving these reports in early 2017, providing clients with information on the 2016 calendar year.
The guide provides details on the requirements for both reports, along with tips on how to ensure firms’ reports meet their regulatory obligations, while also strengthening the client/advisor relationship. The model reports also include input from the Mutual Fund Dealers Association of Canada (MFDA), “so dealers can use them with the confidence that they fully comply with the new rules.”
“IFIC’s new guide for dealers provides details of key requirements for the two new investor reports, along with practical tips on how to ensure they meet regulatory goals and strengthen the investor/advisor relationship,” says Joanne De Laurentiis, president and CEO of IFIC. “The guide addresses the balance between providing enough information to make the reports meaningful to clients and not overwhelming them with too much detail.”
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