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.


CRM2Plus Software, Financial Advisors, investment analysis, portfolio analysis software, Software

Time Management and the New Financial Advisor

by guest blogger Jan Hanson

Time management is one of the hardest skills to develop. Anybody can write a list, add 100 tasks and set a due date. A rare few are able to focus long enough to complete more than 5 of these tasks. It’s in human nature to be distracted. What human nature doesn’t understand is that

  • you need to send out those Happy Birthday emails,
  • talk to your Marketing Assistant,
  • confirm your schedule for the next week
  • keep up appearances in relevant community events,
  • and still have time for your friends and family. (…eating and sleeping are extras.)

Life as an Advisor is always going to require time management. Your to-do list is going to increase as you build your business, and perfect your craft. Once you’re at the top of your game you’re still going to be required to juggle all those things you had to juggle before.   Added to concerns about your revenue stream will be:

  • making time to attend to your waiting list of clients,
  • time to manage your Marketing Assistant so that they are not smothered
  • and time to bat off New Training Managers with a stick while they all try and draw you into their New Advisor Training Sessions.

Cut down on the time that you and your Marketing Assistant spend on Financial Analyses’  by using the right software.   There are tools out there, such as CRM2plus, that allow you  to answer questions, graph performance, create speculative scenarios about investing and restults.   Build pictorials that will stun your clients with the benefits that you provide them.  Spend more time building that book of business with happier more satisfied clients.

With all this success, you’re probably going to need another MA though.. it may be  a good idea to hire some of those new advisors too.. just a thought.

Create Clarity for your Clients


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!


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

CRM2 – A Brief Overview

CRM 2 is a new set of financial rules that has been implemented to ensure investors receive standardized information about the cost and performance of their investments.  Beginning July 15th, 2014, firms are 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.

In addition, and as a means of expanding relationship disclosure, clients must be provided a general explanation of benchmarks and whether the registered firm offers any options for benchmark reporting to clients.



Registered firms will be required to provide clients with an annual account-based investment performance report that can be either part of, or accompany, a quarterly account statement, or be

provided within 10 days of the delivery of a quarterly account statement. This requirement will not apply to a dealer in respect of a client’s account in which the dealer executes trades on the instructions of an adviser acting for the client, nor will it apply to accounts for “permitted clients” that are not individuals. These disclosure requirements will be effective on July 15, 2016. The report must contain text, tables and charts and explanatory notes. The essence of the annual performance report is that clients would be shown the opening market value of an account, plus deposits into the account, less      withdrawals from the account (at market value), which would be compared to the closing market value of the account to determine the change in value of their account over the past 12-month period and also since the inception of the account. Investors will then know how much money they have actually made or lost in dollar terms. This information will be enhanced by disclosure of mandated performance numbers (one, three, five and 10 year (or since inception if less than10 years)).

The disclosure in the annual performance report will be required to include:

  • The market value of all cash and securities in the account at the beginning and end of the 12-month period covered by the report.
  • The market value of all deposits and transfers of cash and securities into the account and the market value of all withdrawals and transfers of  cash and securities out of the account, in the 12-month period covered by the report.
  • The annual and cumulative change in value of the account, calculated according to specific formulas.
  • Annualized total percentage returns calculated using a “money-weighted” rate of return calculation method for specified time periods – one, three, five and 10 year periods and “since inception period” – periods of less than one year cannot be annualized. Special rules will apply to accounts opened before July 15, 2015.
  • The definition of “total percentage return” and a notification that the total percentage return in the

investment performance report was calculated net of charges, and an explanation of the calculation method.

  • For scholarship plans (group RESPs), specific risk and cost disclosure that is unique to these investment vehicles.

Disclosure must be presented on “nominee name” securities separately from “client name” securities.

Significantly, the CSA encourage dealing representatives to meet with clients to help ensure they understand their investment performance reports and how the information relates to the client’s investment objectives and risk tolerance.

Currently, most annual statements from brokerages, mutual fund companies and financial advisors do not include an investor’s personal rate of return – the internal rate of return or the dollar-weighted rate of return. Often, investors are left to their own devices to try to figure that out. And, most clients are ill equipped to understand the new information outlined under CRM II. What are the fees associated with an investment in a mutual fund?  What is a rate of return?  What is volatility?  What is tax efficiency?  What are the fees, returns and volatility of a comparable investment?  While investment professionals generally have an intuitive understanding of each of these terms, they are likely unfamiliar to clients.  Very fundamental explanations of each of these concepts must be given to clients, along with the CRM II mandated disclosures, to avoid misunderstandings and misinformation. The advisor must be able to create an explanatory narrative – to ensure the client’s understanding and answer all the questions that will be raised to and by the client. Thanks to Microsoft Excel as well as the ground-breaking IRR software, CRM2Plus, developed by ESCTT, advisors are equipped with analytical tools that will facilitate performance reporting and explanation.

Join us at one of our fully comprehensive, hands-on workshops and we’ll show you how to create clarity for your clients. And, visit us at our booth at Being Gold: The 2014 CFP® Professional Symposium on November 19th at Arcadian Court, 401 Bay Street in Toronto.  We look forward to seeing you there and answering any questions you may have about our new course offering and software!