CRM2: Are you Prepared?

Did you know…? In a recent industry perspective report issued by PWC there were still 5% of firms (of all respondents) that are still not compliant with the already instituted CRM2 amendments that went into place July 15, 2014. Sourced from the publication link.


The Client Relationship Model – Phase 2 (CRM2) is a three part series of enhanced transparency regulations on fees and performance reporting to clients that heightens the level of investor protection in Canada, by demanding more transparency from investment firms. The regulations implemented on July 15, 2014 mandated increased information for investors such as Benchmark Disclosures, that allow a client to understand how their investment is measured in order to weigh its performance and Pre-trade Disclosure of Costs, which informs the client how much the total cost will be for their investment and if there are any deferred sales charges (DSC) or trailing commissions. Additionally, a requirement was implemented to provide an investor a trade confirmation with regards to debt securities to align with the time of the purchase or sale of the investment.

 The CSA (Canadian Securities Administrators) state that these required disclosures – excluding trade confirmations – demand that this information is conveyed through either a discussion with the client or in writing. With a discussion, there is always a chance a client may forget the complete conversation. If the information is provided in writing however, it can be reviewed and later discussed with your client. What's more, if this information is purveyed through a system with the ability to track and capture the disclosures sent to your client, the dealing representative has not only piece of mind that they can prove the information was disclosed, they have the the ability to actively manage their relationship with their clients.

1to1Real's Private Market Cloud provides exactly this kind of solution, as well as other tools to ensure your communications and operations are always compliant, audit ready, and secure.  Our software captures the deliverable information to your client regarding Benchmark Disclosure – including if they are outlined in your Relationship Disclosure or if they are sent to separately. In fact, our patented software is able to capture all your communications with your client – providing you a mobile digital audit trail accessible at any time.

Trade confirmations are a little different and should be completed and sent directly to the client in connection with the purchase or sale of a security. The trade confirmation should clearly indicate the annual yield of the investment along with any mark up / down, commissions or other service charges. Additional enhancements to the trade confirmations are expected for July 15, 2016. Having automated capture features such as these imbedded into your software solution provides an opportunity to increase the level of service you provide to your clients, while ensuring professional management of your client relations.

 Subscribe to our newsletter to learn more about the approaching CRM2 changes and how we have adopted easy and streamlined solutions to help you in this era of heightened transparency and reporting.