New Infographic Helps Investors Understand What Services They Receive for Their Mutual Fund Fees
Toronto, ON – July 14, 2016 – The Investment Funds Institute of Canada (IFIC) today released an infographic that highlights the services that investors receive for the fees they pay through their purchase of mutual funds.
Improving investor knowledge is a major objective of CRM2 – a new disclosure framework that is being phased in over three years. Under the third phase, which comes into effect July 15, 2016, dealers are required to issue two new reports to investors: one showing, in dollar amounts, the money paid to the dealer on the investor’s account during the previous year, and the other showing how well the client’s investments performed. Dealers have until July 14, 2017 to deliver the first reports to investors; however, most investors will receive their reports early in 2017 (and annually thereafter) because most firms are providing the information on a calendar-year basis.
“We expect the new reports will encourage more investors to talk to their advisors about the costs and performance of their investments,” said Joanne De Laurentiis, IFIC’s president and CEO. “Our new infographic will help advisors explain the services investors receive for the fees that they pay using an easy-to-understand visual format.”
The infographic distinguishes between services provided by fund managers and those provided by dealers and advisors, noting that:
- The fund manager sets the strategy and goals of a fund, chooses and monitors experts who buy and sell investments to reach the fund’s goals, and keeps detailed records for the fund and for clients, including tax reporting, whereas;
- The dealer provides several services directly or through an advisor, such as understanding and reviewing the client’s financial needs and how much risk the client is willing and able to handle, guiding the client to build and maintain a financial plan, buying or selling units of a fund for the client, keeping detailed records of the client’s account, and providing information to the client. Dealers also have responsibilities as members of investor protection funds and regulatory organizations.
“CRM2 places Canada firmly ahead of the rest of the world in providing clear information to investors,” De Laurentiis noted. “Investor-friendly materials, like the infographic we released today, will augment the success of CRM2 by giving investors more knowledge and confidence to pose questions to their advisors, and to make sound decisions about their investments.
The Investment Funds Institute of Canada is the voice of Canada’s investment funds industry. IFIC brings together 150 organizations, including fund managers, distributors and industry service organizations, to foster a strong, stable investment sector where investors can realize their financial goals. By connecting Canada’s savers to Canada’s economy, our industry contributes significantly to Canadian economic growth and job creation. The organization is proud to have served Canada’s mutual funds industry and its investors for more than 50 years.
– 30 –
Senior Manager, Public Affairs