Starting in January 2027, Canadian investors will receive clearer and more complete information about the costs of their investments - through new Total Cost Reporting (TCR) rules (also known as CRM3). These changes aim to make investment costs easier to understand while highlighting the value of professional financial advice.
What is TCR?
TCR is a regulatory initiative led by the Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO). It builds on earlier reforms (CRM2) by requiring disclosure on all costs associated with investment products - not just advisor compensation, but embedded product fees like management and trading expenses. These are not new fees; TCR simply makes them more visible, supporting greater transparency and informed decision-making.
For advisors, this is an opportunity to proactively engage clients in meaningful conversations about costs, value, and outcomes.
Understanding Fees
- Management Expense Ratio (MER) – the cost of managing and operating a fund.
- Trading Expense Ratio (TER) – the cost of buying and selling assets within the fund.
- Fund Expense Ratio (FER) – a new term that combines MER and TER, showing total embedded product costs.
These figures will appear in dollar terms, not just percentages - making it easier for investors to view the real cost of investing.
Example:
Suppose you invest $10,000 in a mutual fund. If the fund has a MER of 1.5% ($150) and a TER of 0.2% ($20), the total FER would be 1.7% ($170).
Under CRM3, your annual statement will clearly show the 1.7% in fund costs — expressed in dollar terms ($170).
The Value of Professional Investment Management
Expertise and Experience
Professional managers leverage their market expertise and data-driven insights -often beyond the reach of individual investors - to make informed investment decisions .
Diversification
Investment managers diversify across sectors, regions and asset types to help lower risk and boost long-term returns.
Risk Management
Professionals manage risk through asset allocation, hedging and scenario analysis to shield portfolios from volatility and downturns.
The Value of Advice
Cost transparency is only part of the story. TCR helps highlight the value of financial advice and the personalized guidance and strategic planning that advisors provide.
Advisors help investors:
- Set and refine financial goals with better savings behaviour outcomes
- Stay invested through market cycles with long-term investment strategies
- Make informed decisions during life transitions and avoid common financial missteps
- Select tax-efficient investment vehicles
As costs become more visible, so too does the advisor’s role in delivering real value beyond performance.
Key Statement Changes Investors Will See in 2027
Starting in 2027, investors will receive a new version of the Annual Report on Costs and Compensation (ARCC) covering the 2026 calendar year. It will include:
- Fund Expense Ratio (FER): a single percentage of fund-level costs (MER+TER) and advisor compensation
- Fund Expense Dollar Value: a clear dollar amount paid in fund-related expenses
- Enhanced formatting and terminology for easier understanding
Resources
Total Cost Reporting: FAQ
Answers to commonly-asked questions about Total Cost Reporting and CRM3.
Learn moreUnderstanding Mutual Fund Fees
A simple guide to mutual fund fees and what they mean for you—because transparency matters.
Learn moreJust What Do These Fees Pay For?
The mutual fund fees you pay provide you with a valuable and important financial service.
Learn moreActive Matters
Dynamic’s Portfolio Management teams leave no stone unturned in order to build investment portfolios that look nothing like the index.
Learn moreIf you have questions about Total Cost Reporting - contact your advisor today.