CRM2: Some advisers still have work to do

By The IJ Staff | November 18 2016 01:30PM

Photo: Freepik

A third of advisors have yet to communicate with clients and disclose the information that they are required to reveal as part of the second phase of the Client Relationship Model (CRM2). According to a survey conducted by The Insurance and Investment Journal, only 70% of advisors have already sent a report on costs and fees to their clients. The results of the survey were released at the magazine's annual conference in Montreal on November 17.

Asked why they had not acted yet, the stragglers said they did not have an opportunity to meet with their clients, did not have a clear idea of how to discuss the subject, were not aware of the requirement, or did not know that it was up to them and not their firm to do so.

Clients uninterested

According to the advisors who took part in the survey, another reason for the delay was the fact that clients were uninterested or were are already aware of the fees they pay. Some advisors lamented the lack of support they had received, the lack of tools at their disposal, and the lack of information on what they are supposed to disclose.

It should be noted that dealers have until July 2017 to send their clients an annual report outlining the fees, remuneration, and the rate of return they have earned. Firms may choose to integrate this information into the account statements they send to their clients.

40% are about to send the reports

Among the advisors who have yet to provide the disclosure statement that is mandatory now that CRM2 is in force, 40% said they are about to send them out, while others plan to send it within 3 months (15%), in 3 to 6 months (23%), or during RRSP season (22%).

Among those who have already discussed the issues raised by CRM2, 95% did so personally: by phone (30%), email (20%), in a brochure (9%), and by regular mail (6%). The survey found that 42% made the mandatory disclosure in 2015, while 18% did so in the first quarter of 2016, 9% acted in the second quarter, and 2% did so in the third quarter of this year.

Advisors and firms are not on the same wavelength

The majority of advisors did not use the tools their firms had provided to help disclose the information required by CRM2. According to the poll conducted by the The Insurance and Investment Journal, 58% of the advisors said they did not use the tools provided by their firm.

Among the reasons for not using in-house tools, advisors indicated that their firm did not offer them any (30%), the tools available did not correspond to their needs (30%), and they did not require them or chose to use their own tools instead (40%).

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