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Investment performance and the cost of advice

​The Canadian Securities Administrators (CSA) have introduced new requirements to ensure investors receive essential information about the cost of their advice and how their investments have performed. These requirements are also known as phase 2 of the Client Relationship Model, or CRM2.

5 ways new rules will help you keep track of the cost of advice and investment performance

The new rules apply to all dealers and advisors registered to trade in securities or provide advice and have been phased-in over a three year transition period from July 2014 to July 2016. Here are some key ways the new rules will help you:

  1. More information about transaction and operating fees
  2. More information about commissions and other fees paid to your dealer or advisor
  3. More information about the performance of your investments
  4. Standard information and calculations
  5. Clearer information about scholarship plan investments

Key dates for new requirements

As of July 15, 2014

  • Pre-trade disclosure of charges – Your advisor or dealer must tell you the charges you will have to pay when purchasing or selling investments.
  • Trade confirmation disclosure for debt security transactions – Your advisor or dealer must tell you the payments they have received from debt security transactions.
  • Explanation of scholarship plan risks – At the time of purchase, your scholarship plan dealer must discuss the risks of potential loss of contributions and earnings.

As of December 31, 2015

  • New account statement – You will get quarterly account statements that include a record of all transactions carried out during the reporting period and information about investments held by your advisor or dealer.
  • Additional statement – You will get quarterly account statements that include information about investment not held by your dealer or advisor. This statement is given if your advisor or dealer has trading authority, receives a trailing commission or other ongoing payment, or if the investments are issued by a scholarship plan, mutual fund or labour-sponsored fund.
Additional statements
If your investments are held by a party other than your dealer or advisor, you will receive “additional statements” that include information that generally corresponds to the information in the account statements required by firms that do hold client assets. The statements will include:
  • Name and quantity of each investment
  • Market value of each investment
  • Total market value of each investment position
  • Cash balance (if any)
  • Total market value of cash and investments
  • Name of the party that holds each security
  • In some circumstances, whether the investments are covered under an investor protection fund
  • List of investments that may be subject to a deferred sales charge.

As of July 15, 2016

  • Deferred sales charge in trade confirmation – Any deferred sales charges when you sell the security must be included in your trade confirmation.
  • Report on charges and other compensation You will get an annual report that includes detailed information on charges and fees paid to your dealer or advisor for your account.
  • Report on investment performance ​You will get an annual performance report that explains how your investments have performed over specific periods of time.
Discussion of the newest cost and performance requirements, as well as examples of the annual charges and compensation report and investment performance report are available from the Ontario Securities Commission (OSC).

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