An overview of CRM3
CRM3 is the third phase of regulatory reforms aimed at improving fee transparency for investors in Canada. This phase introduces the concept of Total Cost Reporting (TCR), which requires presenting the total dollar cost of holding investment funds as a single, easy-to-understand amount.
Key dates
January 1, 2026: official effective date of CRM3 Total Cost Reporting.
Early 2027: The Annual Reports on Charges and Compensation are delivered, showing for the first time the total cost of mutual funds, exchange-traded funds, segregated funds and other investments with embedded fees held in 2026.
The annual reports will show TCR in a standardized format across the industry, allowing easier year-over-year comparison, as well as between products. Simply put, rather than introduce new fees, the reports will provide greater transparency by reflecting all fees, including:
- Fund-specific costs
- Trailing commissions
- Fees integrated into the product structure
The objective of this regulatory shift
Previous phases, known as CRM1 and CRM2, laid the regulatory groundwork to enhance accountability and trust in the advisor-client relationship. This included adding mandated disclosure on fees and returns, as well as client and advisor roles, responsibilities and conflicts of interest.
CRM3 goes beyond previous reforms. The stated intent is to provide investors with a more accurate understanding of the total expenses associated with their investments. Providing greater cost transparency regarding net portfolio performance should support clear and informed discussions and help clients understand the details of their fees. This initiative aims to improve investors’ understanding and, ultimately, confidence in their wealth advisors and their investment decisions.
Regulation is often seen as a constraint, but I see it as an enabler. Standardized cost reporting doesn’t just meet regulatory expectations, it creates a shared and consistent understanding between investors, wealth advisors and fund managers. In addition, it elevates the quality of financial advice through greater transparency and accountability.
– Marie Brault, Vice-President of Legal Services at NBI and Corporate Secretary of National Bank of Canada
This reporting approach aims to give investors additional information for decision-making and enables advisors to communicate costs more precisely.
Transparency as a lever of trust
Complete transparency helps dispel certain misconceptions, such as the notion that wealth specialists could favour their own interests or avoid addressing fees clearly. On the contrary, transparency invites open discussion, underscoring that compensation and investment costs are linked to concrete benefits.
A better understanding of fees helps:
- Clarify the relationship between wealth advisors and their clients, grounded in alignment of interests and long-term investment outcomes
- Emphasize the results and measurable benefits that clients receive from disciplined portfolio construction, portfolio management and due diligence
- Highlight the value of advice, focused on personalized service
Transparency inspires trust, which is a key factor in encouraging investing and adopting sound financial habits.
CRM3 presents a key opportunity: to highlight the value of advice. Surveys, such as the one conducted annually by the Securities and Investment Management Association (SIMA)1, show that investors acknowledge they achieve better returns when they work with a wealth advisor. The expertise, discipline, and objectivity provided by these specialists are undeniable advantages.
– Marie Brault
Turning CRM3 into a client education opportunity
Most wealth advisors shouldn't see major changes. They are already working in their clients’ best interests, taking into consideration all costs and performance expectations.
However, CRM3 introduces a new feature: shedding light on certain existing fees that, until now, were not necessarily clear or known to clients. This may require a reassessment of some advisors’ explanatory approach.
Proactive suggestions
The response to CRM3 can vary greatly depending on the preparation of wealth advisors. Receiving a new statement reflecting TCR, without prior explanation, can raise questions and concerns among investors.
To prevent such a scenario, consider the following:
- Prepare and share a sample CRM3-compliant annual report before sending the first personalized report to clients
- Meet clients and walk them through the new information
- Provide an FAQ to address potential concerns
Upstream support will help maintain the trust-based relationship, which is essential to the success of both wealth advisors and investors.
– Marie Brault
Could CRM3 encourage passive investing?
Fee transparency shouldn’t necessarily favour passive investment products over professionally managed active solutions, notes Marie Brault. Transparency does not change investors’ objectives. If a client seeks to outperform an index, a passive solution won't help them achieve their objective. In addition, the surge in passive investing predates the arrival of CRM3 and cannot be attributed solely to enhanced fee disclosure.
The main challenge of a diversified portfolio lies in striking the right balance between a low-cost passive component that replicates the market and an active component that aims to generate superior performance. While passive investments typically imply lower fees, wealth advisors play a critical role in articulating the purpose and added value of active management, particularly when higher fees are justified by expertise, risk management, and return potential.
In fact, despite the growing popularity of passive investing, the case for active management may be stronger than ever in today’s environment. Markets have become increasingly concentrated, heightening the risks of index‑driven exposure to overvalued securities. Skilled active managers can selectively position portfolios, manage concentration risk, and avoid areas of excessive valuation. Rather than discouraging active strategies, CRM3 offers wealth specialists an opportunity to clearly demonstrate how active management fits into a client’s overall investment objectives and risk profile.
A step forward that reinforces the value of advice
This new phase should encourage investment product providers, like NBI, to continue innovating and expanding their range of investment solutions with varied fee structures. It makes it possible to combine lower-cost passive products with higher-fee active solutions offering in-depth expertise or complexity.
Ultimately, there is no one-size-fits-all solution that suits all investor profiles and needs. A client-centric approach requires access to a diversified offering, one that allows advisors to offer investment solutions based on goals, risk tolerance and time horizon. Rules that promote clarity help ensure these choices are made deliberately.
In summary, CRM’s Phase 3 is part of a positive industry dynamic. More than just a regulatory milestone, it represents a strategic opportunity to enrich advisory relationships and conversations. With greater transparency and a deeper understanding of fees, wealth advisors and their clients can strengthen their trust-based relationship and make more informed decisions in an ever-changing financial industry.
Learn more
The most frequently asked questions about CRM3
5 Lessons learned from CRM2 on fees with clients
The relevance of active management in today’s markets
Source
1. Survey of Canadian Investors (p. 39), The Securities and Investment Management Association (SIMA) and Pollara Strategic Insights, October 2025.