CDA Essentials 2016 • Volume 3 • Issue 6

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39 Volume 3 Issue 6 |
Reports will not show the compensation paid to
individual advisors, but rather to the investment
companies they work for, and they must also provide
a brief explanation of what trailer commissions are.
For mutual funds, it’s worth noting that CRM2
disclosure regulations only deal with the portion of
your MER that is paid to your investment firm. To find
out about the fund management fees associated with
the funds you own, you would still need to check the
product disclosures for those funds.
• The annual report on performance. This is designed
to give investors a better understanding of their
personal rate of return after costs have been
deducted. It provides results for your full account,
which may include individual equities, bonds,
mutual funds, or cash. The report must show, in
percentages and actual dollars, the market value at
the beginning of the year, deposits, withdrawals,
dividends, any change in market value, and the
closing balance at the end of the year. It will also show
your compounded, annualized rate of return from
the time you originally opened the account with the
institution, as well as your returns for the past 3, 5, and
10 years if that information is available.
The purpose of this article is to provide a brief overview of
the new reporting requirements. For further explanation
of all the particulars of phase three of CRM2, we suggest
that you speak to your financial advisor or investment
firm. a
Advisory services are provided by licensed advisors at CDSPI Advisory Services Inc. Information
in this article is for informational purposes only and is not intended to provide financial, legal,
accounting or tax advice. Restrictions to advisory services may apply in certain jurisdictions.
If You Hold CDSPI Funds
Since CDSPI Funds are segregated funds, which are regulated
by the insurance industry, CRM2 requirements do not apply to
them. That being said, your Investment Planning Advisor can
provide similar information to that required by CRM2 at your
request.
It’s important to point out that CDSPI funds do not charge
trailer fees, and there are no front-end or back-end “loads”
(commissions) when buying or selling a fund. Since advisors
from CDSPI Advisory Services Inc. do not work on
commission, they can be objective about the investments
they recommend. Their financial planning advice is offered as
a member benefit of the CDA and participating provincial and
territorial dental associations.
A benefit of our structure is that we are able to leverage the
buying power of the dental community to negotiate lower
fees, which helps lower the MERs for our funds. While MERs
for funds in Canada can reach as high as 3% or more, the
average MER for CDSPI funds is 1.26%.2 As you can see from
the accompanying chart, it’s important to consider fees in any
investment decision.
If you would like to learn more about the advantages of
investing with CDSPI Funds, I invite you to contact us at
1-800-561-9401 or send an email to
Do Fees Make a Difference?
You be the judge. This chart shows two examples of the
incremental returns you would achieve with a 1% fee advantage
on an investment of $100,000 over 20 years.
1.Source:BusinessNewsNetwork,2015
2.Management feesaresubjecttoapplicabletaxes.
Supporting Your Practice