CRM2, CRM2Plus, CRM2Plus Software, Financial Advisors, investment analysis

Working with the Average Investor

The average investor lacks the time to make sense of their financial reports.  The biggest benefit of using a financial advisor is having a credible, well-educated individual to explain performance and help guide financial decisions.   Explaining financial results and guiding decision making are key roles for the advisor.

Easier said than done!  The majority of financial statements generalize important information into percentages that are not meaningful or easily understood.  Subsequently the onus is on the financial advisor to create clarity, which can become a time consuming task.

Some very successful financial advisors have turned to 3rd party software to help explain client performance.   One well reviewed software application for portfolio analysis is CRM2plus.

CRM2plus software provides clarity to financial statements.  Information is condensed into visuals that are easy to read and understand. Statements can be read into CRM2plus, analyzed and graphed at the press of a button.  Questions such as ‘what if I did this?’ can be answered easily with visuals and actual market data.   Investment Analysis Software

  “How does CRM2plus differ from what is available in the marketplace?” 

Answer:  CRM2plus provides an advisor with tangibles to demonstrate their value to their high net worth clients.

The key competitive advantages of CRM2plus software are;

  • Clients see graphically what was invested and when, against portfolio market value over time.
  • Performance of the complete portfolio can be shown on one graph. The advisor can analyze various assets and aggregate them for a complete financial picture, including external assets such as real estate investments.
  • The advisor can group clients. This is relevant when analyzing a family’s pooled assets such as husband and wife’s RRSP’s, TFSA’s, a family trust, and a business.
  • Benchmarking: Using data from major stock market indices including S&P and NASDAQ , the software can create a transactionally consistent comparison portfolio for benchmarking. Indices can be weighted, to demonstrate the effects of market movements on a client portfolio.

Why is CRM2plus software important?  Success comes from being the best and this is easier with the best tools.   CRM2plus is a competitive advantage for the Financial Advisor to retain high net worth clients.


Annual Performance Reporting, benchmarks, CRM2, portfolio analysis software

CRM2 Reporting made Easy

CRM2 reporting requirements are coming.   In the UK and Australia, where similar rules were adopted, the fallout was huge in the financial services industry.  Alone, the new reporting requirements demanded more time and effort from financial advisors and created more office burden.

Once CRM2 requirements were met, the new reports raised questions in clients’ minds, resulting in even more time and reporting from FA office staff.

The Canadian financial services industry will be faced with these challenges shortly. CRM2 reporting and meeting requirements can overwhelm you.  What you need are new and better tools.

Some of the top performing FA’s in Canada are using CRM2plus portfolio analysis software.

Using the right tool for the right job has always been a hallmark of the professional.  You would not hire a roofer who came with just a hammer and a bag of nails.   If he doesn’t have a nail gun, he is not a professional.  Now that these new requirements are here, you need new and better tools.  CRM2plus portfolio analysis software was created in anticipation of CRM2 reporting challenges, to ease the burden on financial advisors.

CRM2plus portfolio analysis software assists you to:

  • Create clarity for your clients – answer questions and provide explanations
  • Easily meet CRM2plus reporting requirements and more
  • Differentiate yourself from the crowd
  • Demonstrate the value that you provide to your clients
  • But seriously, most of all, makes it easy to prepare the docs.

CRM2plus portfolio analysis software helps you demonstrate your value to clients and gives you that competitive edge.


RRSP Season

Annual Performance Reporting, CRM2, CRM2 Performance Reporting Workshops, CRM2Plus, CRM2Plus Software

The Phases of CRM2 – An Infographic

This infographic, courtesy of Mackenzie Investments, depicts an excellent summary of the CRM2 rules, from what’s already been implemented, to what’s to come…

CRM2Plus Infographic

Creating clarity for your clients is key. Let us show you how to streamline your conversations with CRM2Plus.

Annual Performance Reporting, CRM2, CRM2 Performance Reporting Workshops, CRM2Plus, CRM2Plus Software

CRM2 – What You Need to Know

There’s a lot of information swirling around with respect to the implementation of CRM2 – the good, the bad and the ugly. I came across an article on the Wealth Professional website, penned by Will Ashworth, that offers a very descriptive and accurate overview of exactly what advisors need to be aware of and prepared for with respect to the new rules.

Here is an informative excerpt I’d like to share:

There are four basic ideas that all advisors need to pay attention to when it comes to pre- and post-CRM2 implementation.

1) You will need to be prepared to answer client questions. Sure, some of the information provided to clients under the new rules will be sent to them directly, but its key that advisors have answers ready for when the inevitable cavalcade of questions comes their way. Communication is critical to surviving the inevitable onslaught.

2) While benchmarks themselves aren’t a requirement of CRM2, advisors should be ready to discuss with clients how benchmarks can be used to assess performance. So, if your client’s invested in a Canadian equity mutual fund, you won’t be comparing that fund’s performance with the FTSE TMX Canada Universe Bond Index but rather something like the S&P/TSX Composite Index. Also, it’s important to remember that the client will receive money-weighted returns, which include additions and withdrawals, whereas indexes use time-weighted returns.

3) Remember when having the discussion about client costs, it’s essential to make that discussion a positive focused on the advisor’s value. IFIC has gone to great lengths to prepare model reports for advisors looking to bone up ahead of that difficult talk. But be warned: If you simply talk about cost and performance without bringing context to the discussion, your clients are naturally going to question the value they receive. Be proactively reminding them of the value you add.

4) Continually update your understanding of CRM2. It’s not enough to read information WP is publishing on the subject. You’ve got to dig deeper looking for every advantage possible in using you as opposed to another advisor. Continuing education includes staying abreast of CRM2. You want to be on the right side of the knowledge debate.

So, how do you stay ahead of the CRM2 game? There’s a ground-breaking software for that! Let me introduce to you CRM2Plus. CRM2Plus was created to serve CFPs as they navigate the new regulations imposed by CRM2. In response to the newly mandated disclosures, many Financial Planners began asking for custom analytics of their client’s portfolios. As most of the necessary analysis was common, CRM2Plus was developed as a standardized internet application that can produce the analysis quickly and efficiently.


And, we’ll teach you how to use it. Let us help make it easy for you!

For more information:

Annual Performance Reporting, CRM2, CRM2 Performance Reporting Workshops, CRM2Plus, CRM2Plus Software

CRM 2 and IRR

On June 14, 2012, the Canadian Securities Administrators (CSA) published for comment a second version of amendments to National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (NI 31-103) with respect to the second phase of the Client Relationship Model initiative (CRM II). New regulations under CRM 2 affect registrants under both IIROC and the MFDA.

CRM 2 is a new set of financial rules that have been implemented to ensure investors receive standardized information about the cost and performance of their investments.  Since July 15th, 2014, firms have been required to disclose charges and compensation from trades.  By July 15th, 2016, it will be mandatory for advisors to provide investment performance information to clients.  This will entail an annual account performance report, which will include the annualized total percentage return for the client’s account, with text, tables, charts, explanatory notes and a definition of total percentage return.

A key mandate of CRM 2 is that registered dealers must disclose to clients costs and compensation as well as provide meaningful reporting of investment performance.  The money weighted internal rate of return (or net present value internal rate of return) is one of the pieces of data that will be given to clients.  Using the above explanations, it should be clear to a client that a money weighted internal rate of return is simply the annualized rate of return that takes into account cash inflows and outflows.

A client who has been provided a rate of return as well as fees has some information at their disposal, but may lack context.  Was the performance good or bad?  Were the fees too high, or were they fairly low?  Is this an aggressive portfolio facing a temporary slump?  Did an advisor’s advice prevent returns from being taxed away?  Was their portfolio liquid enough to meet unexpected withdrawals?



Over the long term, the performance of a portfolio depends on the following factors:

  1. the performance of the market as a whole;
  2. the skill of the portfolio advisor; and
  3. the actions of the investor

Influence of the Market

Most portfolios do well when the market does well. A common saying is that a rising tide lifts all boats. On the other hand, when the market is experiencing a correction, the advisor would have to be either very skilful or very lucky to generate a positive return for the portfolio.

Influence of the Portfolio Advisor

The composition of an actively managed portfolio is usually different from that of the market portfolio. Portfolio advisors add value by using their analytical skills and knowledge of companies to identify stocks they believe will outperform the market. The additional return, after allowing for risk, is sometimes referred to as alpha, as opposed to beta, which is the return from simply tracking the market. Of course, it is possible for portfolio advisors to make mistakes and choose stocks that end up underperforming. In this case, the alpha is negative.


Influence of the Investor

Most investors probably think that, having entrusted their portfolio to an advisor, they are entitled to hold him or her fully responsible for its performance. This is incorrect. The client’s own actions also have a major impact on the portfolio’s performance, for better or worse.

Most of the time, it’s for worse. Investors contribute to their portfolio’s performance through their decisions to add more money to the portfolio or withdraw money from it. Studies have shown that investors’ actions reduce the annual return on their portfolio by approximately 1.5 percentage points. Think of it as a kind of negative alpha attributable to the investor. The negative alpha is truly enormous, especially when compounded over time. It can make the difference between a comfortable and a frugal retirement.

Investors’ alpha is negative because their decisions are often driven by emotion. Suppose they inject new money. This may be at a time when the market is overvalued and good investment opportunities are scarce. The portfolio advisor will then have to decide whether to buy investments for the portfolio at inflated prices or keep the money in cash—a choice between the devil and the deep blue sea.

Alternatively, suppose investors decide to withdraw money from their portfolios. Perhaps they have been spooked by a recent drop in the market. This is actually the worst time to withdraw money. In order to satisfy the client, the portfolio advisor will need to sell some investments at depressed prices.

The sad reality is that investors consistently choose the wrong timing. They tend to inject new money after a run-up in stock prices, when everything has become expensive, and withdraw from the market after a large drop in stock prices, when everything has become a bargain.


When developing CRM II, the concern of the securities regulators was to enable investors to figure out how they are progressing towards their investment objectives. Quite rightly in the view of this author, the return that CRM II requires dealers and portfolio advisors to provide to their clients is the money-weighted return.

The money-weighted return is a personal rate of return. It is most unlikely that two investors will have the same personal rate of return even if they happen to use the services of the same portfolio advisor. This is because the money-weighted return takes into account all the factors that affect the return on a portfolio, including the investor’s decisions. It is most unlikely that two investors will add money to or withdraw money from their respective portfolios at precisely the same time.

Annual Performance Reporting, CRM2, CRM2 Performance Reporting Workshops, CRM2Plus, CRM2Plus Software, Financial Advisors

Create Clarity for your Clients

If you’re a CFP, you’ll benefit from our groundbreaking portfolio analysis software, CRM2Plus –

And, we’ll teach you how to use it!

Visit our booth at the Being Gold: The 2014 CFP® Professional Symposium in Toronto!


CRM2, CRM2 Performance Reporting Workshops

CRM2plus Software

CRM2plus  is CRM2 software which was developed to address the upcoming CRM2 performance reporting mandate in the wealth management sector.  CFP’s, members of IIROC and MFDA (Mutual Fund Dealers Association) are required to report IRR (Internal Rate of Return) performance and fees.  The CRM2plus software gives financial planners a detailed analysis and reports on

  • Quarterly returns
  • Annual IRR calculations
  • Comparison between net investment and historical account value
  • Benchmark Comparisons
  • Best and worst months/quarters/years

so that clients can understand their portfolio performance.  Individual accounts can be looked at separately or aggregated as desired.  Portfolios can be compared against benchmarks including S&P, TSX, DEX Midcap Bond Index, MSCI and EAFE.


-developing software applications for Financial Services / Wealth Management Industry, Insurance and Construction.