Empowering transparency: Total Cost Reporting (TCR) enhancements

Total Cost Reporting (TCR), also known as CRM3, is a new regulatory initiative led by the Canadian Securities Administrators (CSA) and the Canadian Council of Insurance Regulators (CCIR). Effective January 1, 2026, this framework introduces a new level of transparency in how investment costs are disclosed on investors' Annual Report of Charges and Compensation ("ARCC").

The first TCR-enhanced statements covering the 2026 calendar year will be delivered to investors in January 2027.

With TCR, investors will receive full disclosure of all costs associated with mutual funds, ETFs and segregated funds. For mutual funds and ETFs, the TCR enhancements add new reporting requirements to the ARCC, which will include the embedded costs of owning investment funds, as well as the total cost of investing, in dollars, empowering investors to make better-informed decisions and building deeper trust with advisors through enhanced transparency. 

What’s changing

Starting in 2027, investors will see a clear, consolidated view of their investment costs on their ARCC including:

  • Fund Expense Ratio (FER) that combines both MER and TER, showing the embedded cost of owning each fund as a percentage.
    • - Management Expense Ratio (MER) covers management fees, operating costs, and taxes.
    • - Trading Expense Ratio (TER) reflects trading-related costs.
  • Total fund expenses in dollars – this is the cost in dollars of embedded fees for investment funds held during the year.
  • Direct fund charges include switch fees, redemption fees, deferred sales charges (DSCs), short-term trading fees and any applicable rebates, and management fees charged by IFMs directly to investors, outside of the fund.
  • Advisor and dealer compensation which is already disclosed under CRM2.
  • Combined total annual cost of investing in dollars, representing the full picture of what investors pay.

This update ensures investors understand exactly what they pay, both to product providers and to their advisor/dealer, for comprehensive transparency.

Turning regulation into opportunity

While TCR increases reporting requirements, it also offers advisors a powerful opportunity to reinforce both the value of advice, and the value of the funds in their clients' portfolio. By helping clients understand both what they pay and what they receive in return, advisors can highlight that cost alone doesn’t tell the full story. Professional guidance, disciplined portfolio management and strategic planning all add lasting value — and transparency helps advisors demonstrate this.

What advisors can do now

Start the conversation early
Begin discussing the upcoming changes with clients well before 2027. Explain how their statements will evolve and how the new format benefits them.

Educate clients
Explain what a Fund Expense Ratio consists of. Help your clients understand why certain funds carry higher costs (such as actively managed versus passive funds) and how those align with their investment goals.

Review portfolios
Use this period to assess each client’s holdings. Ensure fund choices remain aligned with their objectives and risk tolerance. Be prepared to explain higher-cost investments in terms of value delivered.

Highlight the value of advice
Reinforce that cost does not equate to value. Your role includes investment expertise, disciplined decision-making, risk management and behavioural coaching that help your clients stay invested through market cycles.

Prepare for 2027
Use 2026 to update client education materials, FAQs and meeting templates so that when enhanced statements arrive, your clients are informed, confident and reassured.

Empowering clients through transparency

TCR empowers investors to ask more informed questions about cost, value and performance. Encourage these conversations as they strengthen trust and demonstrate your commitment to openness and partnership.

Invite your clients to view their new TCR statements not as compliance documents, but as tools for better financial understanding. Help them connect the numbers they see with the service and results you provide.

Next steps

As TCR takes effect, lead the conversation. Use the new reporting framework to highlight the full value of advice and how your guidance enhances outcomes far beyond what fees alone can show.

Encourage your clients to review their statements and discuss what the total cost of investing means in the context of the personalized value you deliver.

 

 

For advisor use only.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

Although we endeavour to ensure the accuracy and completeness of this document, we assume no responsibility for any reliance upon it.