Which makes you sweat more: the birds-and-bees talk with a world-weary teen or the services-and-fees talk with your blindsided client?
You’re on your own with the former. For the latter, follow the tips in part three of IFIC’s three-part series aimed at helping advisors ensure clients get the most from the new reports they’ll soon receive under CRM2. (Part one has conversation tips, and part two focuses on the performance report.)
Tips for “the talk”:
- Locate the fees for your client in the CRM2 annual report, and explain that these fees are paid by the client to the firm for the firm’s services. (Also indicate whether the report includes costs for insurance investments or GICs.)
- Explain which fees aren’t included, such as fund management fees, trading expense ratios, foreign-exchange spread and short-term trading fees.
- Explain why the MER in the fund facts is different from the client’s costs for the fund (the client’s costs exclude fund management fees and are based on the amount and timing of investments).
- Be ready to list the services you provide. IFIC provides a sample service list, which includes a service you might have missed: belonging to an investor protection fund and to regulatory organizations that hold the industry to high regulatory standards. Here’s a handy infographic of both dealer and fund manager services.
Read part three of IFIC’s three-part series here.