What investors should know about the new CRM2 performance reports

In January 2017, new CRM2 Annual Reports will start landing on investors' kitchen tables or email inboxes. Without a doubt, they'll have plenty of questions … and their advisors need to be prepared with the answers. At CRM2 Navigator, we’ve discovered there’s a lot of confusion around the new money-weighted performance information in particular. Here's what investors should know about the new CRM2 performance reports.

Something new for everyone

There will be something new in CRM2 performance reporting for every investor. For some, this will be the first time they’ve seen any form of performance figures. For others, the money-weighted calculations will be new. Certainly, for all investors, the format will be new. In all cases, clients may have questions for their advisors or be concerned.

Use performance to track progress toward a goal

Advisors need to understand the new money-weighted return calculations and be ready to talk to clients about what they’re seeing on their reports. Importantly, advisors should understand how this new performance information benefits clients and how to use it to help them measure progress toward a goal.

Key concepts about performance

Here’s an example of a CRM2 performance report, with callouts describing the key information investors will see. The design of the report will vary by dealer firm, as will some of the terminology used.

Inception is the regulatory term that indicates the start of the reporting period. If a firm lacks the data to calculate performance since the account was opened, it can choose an inception date – with some restrictions. Many firms are choosing to use January 1, 2016 to indicate the starting point for their performance calculations.

Money-weighted rate of return is the calculation method used on the CRM2 reports. Because it's not a customer-friendly term, some firms have adopted different terminology.

Benefits for investors

The goal of the new reports is to help investors be better informed about their investments by providing greater clarity about the performance and cost of their accounts. The new performance information will help clients evaluate how well their money has performed overall. An advisor can use this personal rate of return to help a client track their progress toward a goal.


CRM2 Navigator is your leading source for CRM2 education, training and implementation support. We offer financial firms and their advisors a complete CRM2 knowledge program to position advisors to be on the receiving end of money in motion. Our series of workshops, training sessions, videos, and client-facing tools help advisors have comfortable, confident conversations with their clients about fees, performance and value.

Our training topics include What performance reporting means to investors, Explaining Time-and Money-Weighted Returns, What fee reporting means to investors, Discussing your fee-worthy value, Segmenting and prioritizing your book, and many more.

Want to find out more about CRM2 Navigator? Please get in touch with us at 416-527-0323 or info@crm2navigator.com