CRM3 Explained: What Canadian Investors Need to Know Before 2027

About This Episode

CRM3 is the next major evolution in investment cost transparency and it arrives on Canadian investment statements in early 2027.

In this episode, Keith Matthews is joined once again by TMA's chief compliance officer and director of operations, Michael Baldoni, for a follow-up to their episode on fiduciary care. CRM3 follows CRM1 and CRM2, two earlier rounds of fee disclosure reform, but goes a step further with a single number, the FER, that shows exactly what your investments cost you in dollars. Keith and Michael break down what's changing, what it means for your statement, and the questions worth asking your own advisor once it arrives.

Michael walks through the full history of the CRM framework, from CRM1 in 2009 to CRM2's fee and performance reporting, all the way to what CRM3 will require: a complete, dollar-by-dollar breakdown of every cost layer in a client's portfolio, including embedded fund fees that many investors have never seen clearly reported before.

Keith and Michael discuss what investors will actually see on their new statements, who stands to benefit most from this change, which firms and advisors will be under pressure, and what questions every investor should be asking right now.

If you want to know exactly what you're paying, and what you're getting for it, this is the episode for you.

Happy listening!

Key Topics Covered:

• What is CRM3 and why does it matter for every Canadian investor? (02:05)
• The evolution from CRM1 to CRM2 to CRM3 — a 20-year journey toward transparency (04:15)
• CRM1 in 2009: documenting relationships, services, and responsibilities (04:15)
• CRM2 from 2013 to 2017: fee disclosure in dollars and performance reporting (05:41)
• CRM3: the next step — total all-in cost transparency, including embedded fund fees (07:11)
• What is a FER (Fund Expense Ratio) and what does it include? (08:07)
• MER vs. TER — what most investors don't know about trading expense ratios (08:55)
• These aren't new fees — the difference between disclosure and transparency (10:51)
• Walking through the math: the four cost layers on a $1 million portfolio (13:04)
• Why high-fee strategies will be impossible to hide after CRM3 (15:28)
• Cost vs. value — why cheapest isn't always best, and why services matter (16:32)
• Where embedded fees were previously disclosed — and why most investors never noticed (19:05)
• Does having an embedded fee automatically make an investment bad? (19:42)
• The hierarchy of investment costs: DIY, stock-picking advisors, index strategies, full-service firms (20:13)
• The winners: investors and low-cost index-based strategies (22:03)
• Who will be under pressure: branch-level advisors and high-fee mutual fund providers (23:26)
• Canada's largest mutual fund — a real example of what CRM3 will reveal (24:11)
• Questions every investor should ask their advisor right now (26:10)
• How long before the industry shifts? A 5 to 7 year evolution (26:42)
• Final thoughts: CRM3 is a very good thing for Canadian investors (28:12)

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