In the wake of CRM2, clients are paying more attention to the fees they pay. And regulators are stepping in by offering new tools to help them understand how different investment costs impact portfolios.
For example, the British Columbia Securities Commission has launched its Take a Look campaign, which offers a quiz about investment costs, a new fee calculator and a fee guide investors can download. As investors take the quiz, some of the messages they get are:
- “Whether your investments are performing well or poorly, even a small difference in fees can make a big difference to the size of your portfolio over time.”
- “Make a habit of asking your investment advisor about the fees you pay for each investment, [and] always ask your investment advisor if there’s a lower fee option that’s right for you.”
- “Paying a 3% rather than a 2% fee on your $20,000 investment could reduce your return by more than $6,000 over 20 years, assuming a 5% return.”
As well, CSA is promoting four videos that look at how advisers must report costs, performance and the value of investments.
To help clients understand your fees, be ready to answer their questions and consider offering similar tools. Also, check out the articles below for recent industry news, and for tips on communicating your value to all clients.