CRM2: The Nexus Approach to our CRM2 Reports

Topic: CRM2

R. Denys Calvin, CFA

January 24, 2017


Print & Share

Print

CRM2: The Nexus Approach to our CRM2 Reports

With changing securities regulations coming into effect, investment firms are now required to provide individual investors with specific additional information about their portfolios at least annually. Most firms, Nexus included, will begin providing reports containing this additional information in January for the calendar year just ended.

We have previously commented on this new information in our CRM2: Cutting Through the Complexity series and in a special issue of our newsletter, Nexus Notes. Here we provide a description of what Nexus’s CRM2-compliant reports will look like in an easy-to-understand way.

Reports must be provided for each account a client holds. Thus, a couple with RRSP and tax-free savings accounts for each person, along with a “cash” or taxable account held jointly will receive 5 separate CRM2 reports from their management firm. Each contains information about two broad topics: the investment performance of an account, and the compensation paid to Nexus in respect of the account.

Investment Performance

The investment performance information is presented in three different, but complementary ways. The first is a “Change in Market Value” table. It shows, in dollars and cents, the value of the account at the beginning and end of 2016, as well as the change between those two values caused by each of the following: (a) additions or deposits to the account by the accountholder; (b) withdrawals from the account by the accountholder; and (c) the combination of investment income, capital gains or losses, and fees and expenses.

The second way investment performance is presented is as a “total percentage return”. This is a rate of return that expresses the total of (a) all income earned in the account, (b) cumulative realized and unrealized capital gains and losses in the account, minus (c) all fees and expenses for the account, as a proportion or percentage of the average dollar value of the account. This performance measurement is a “net” return – the return after deducting all fees and expenses. In addition, because it is “dollar-weighted”, the return is influenced by the timing and size of deposits to and withdrawals from the account by the accountholder.

Finally, investment performance is presented graphically with a simple bar chart. The chart shows the value of the account – both absolutely and comparatively – at the beginning and end of 2016.

Fees

In addition to investment performance, the report addresses two aspects of Nexus’s compensation pertaining to an account. The first is the fee, in dollars and cents, paid to Nexus in 2016. The second is a table outlining the fee schedule or formula used to calculate the fee. To tie those two aspects together, the report also shows the fee paid as a percentage of the average annual account value.

We have endeavoured to provide the information required by regulation in as meaningful a way as possible. In the future, the layout and content of these reports will doubtless change depending on input from clients and changing requirements. However, it is our aim to provide clients with the information needed to understand CRM2 and cut through the complexity. At Nexus, we believe transparency and disclosure are important: every investor should understand how their investments performed and what they are paying for investment management.

Looking for further reading on our CRM2 blogs? Click here to visit our CRM2: Cutting Through the Complexity series. You can also read the full series in our Special Edition of Nexus Notes here.

More Like This...

See another CRM2 blog post that may be of interest to you.

CRM2: Measuring Your Returns, The Right Way

Topic:
CRM2
Excerpt:
What’s the right way to determine the greatest baseball pitcher of all time?

More Like This...

See another Foundations & Endowments blog post that may be of interest to you.

Charitable Giving Made Easier

Topic:
Foundations & Endowments
Excerpt:
Giving to charities and supporting our community are important to us at Nexus. We donate a portion of our management fees back to the charities and

More Like This...

See another Human Interest blog post that may be of interest to you.

The Case for Openness – An Open and Shut Case?

Topic:
Human Interest
Excerpt:
From time immemorial, mankind has been open. Open to new ideas, open to trade, and open to migration – the three critical ingredients for progress.

More Like This...

See another Inside Nexus blog post that may be of interest to you.

Here we Grow Again!

Topic:
Inside Nexus
Excerpt:
Recently, the Nexus team welcomed our seventh new face to join us since the start of the pandemic in 2020. As growth is an integral part of our

More Like This...

See another Investments blog post that may be of interest to you.

Lessons From the Art World and Beyond

Topic:
Investments
Excerpt:
“Exactitude is not truth.”

More Like This...

See another Pearls of Wisdom blog post that may be of interest to you.

“Work, Work, Work, Work, Work, Work”

Topic:
Pearls of Wisdom
Excerpt:
This has been a busy year. I’ve had lots happening on the home front (a wedding!) and lots going on at the office (too long to list!) Managing work

More Like This...

See another Tax Planning blog post that may be of interest to you.

Saving in my Professional Corporation – It’s a Great Idea!

Topic:
Tax Planning
Excerpt:
The ability for professionals in Canada to incorporate their practice has existed for some time. Doctors, dentists, lawyers, accountants, and other

More Like This...

See another Wealth Planning blog post that may be of interest to you.

Living to 100

Topic:
Wealth Planning, Living to 100
Excerpt:
“You’re going to live to 100!” For some, this may sound like a fantastic, welcome prognosis. They imagine gazing at sunsets every evening at the

On a Side Note…

See another CRM2 Nexus Notes Quarterly article that may be of interest to you.

No posts found.

On a Side Note…

See another Foundations & Endowments Nexus Notes Quarterly article that may be of interest to you.

Charitable Giving Made Easier

Topic:
Foundations & Endowments
Excerpt:
Giving to charities and supporting our community are important to us at Nexus. We donate a portion of our management fees back to the charities and

On a Side Note…

See another Human Interest Nexus Notes Quarterly article that may be of interest to you.

The Case for Openness – An Open and Shut Case?

Topic:
Human Interest
Excerpt:
From time immemorial, mankind has been open. Open to new ideas, open to trade, and open to migration – the three critical ingredients for progress.

On a Side Note…

See another Inside Nexus Nexus Notes Quarterly article that may be of interest to you.

Here we Grow Again!

Topic:
Inside Nexus
Excerpt:
Recently, the Nexus team welcomed our seventh new face to join us since the start of the pandemic in 2020. As growth is an integral part of our

On a Side Note…

See another Investments Nexus Notes Quarterly article that may be of interest to you.

The End of an Era – Inflation is Back!

Topic:
Investments
Excerpt:
Inflation talk is dominating the news. It is on the mind of the man in the street and investors alike – and not just in North America or the lands of

On a Side Note…

See another Pearls of Wisdom Nexus Notes Quarterly article that may be of interest to you.

A Table for None, Please; Working From Home on the Rise

Topic:
Pearls of Wisdom
Excerpt:
Reading is one of the principal occupations in our profession. As we digest a wide range of material, interesting ideas and surprising facts – some

On a Side Note…

See another Tax Planning Nexus Notes Quarterly article that may be of interest to you.

Saving in my Professional Corporation – It’s a Great Idea!

Topic:
Tax Planning
Excerpt:
The ability for professionals in Canada to incorporate their practice has existed for some time. Doctors, dentists, lawyers, accountants, and other

On a Side Note…

See another Wealth Planning Nexus Notes Quarterly article that may be of interest to you.

From The Editor: What’s My Age Again?

Topic:
Wealth Planning, Living to 100
Excerpt:
How old are you? It’s a simple question, one we readily know the answer to, although some of us might not want to talk about it. And why do we know