By Tom Bradley

We've been beating the drum for a long time on the need for better client reporting, both in terms of fees and investment returns. In our view, it's the biggest improvement the industry could make on behalf of its clients (I make this point in a recent interview with Morningstar).

Fortunately, the regulators are forcing investment dealers to act. Through their CRM2 initiative, the Canadian Securities Administrators (CSA) will require that they provide this valuable information by July 1st, 2016.

What amazes me about CRM2 is not that it's happening, but that it's such a big deal. It appears that CRM2 is wealth management's Y2K. I knew that dealers, big and small, would have to write lots of computer code to generate the correct numbers and present them in a readable format. There's definitely additional expenses and capital costs involved. But I didn't expect a new service industry to pop up around helping dealers adapt to the changes.

I'm referring to the emails, special supplements in trade publications, booths at conferences and new courses, all from fund companies and consultants offering to help dealers get ready for July, 2016.

At Steadyhand, we've been living CRM2 since we started in 2007, so I could be accused of being out of touch on this issue, but ... are you kidding me? Do advisors really need to be coached on what to say when they're talking to clients about fees and returns (“Don't use the words 'fees' or 'charges' ... ‘costs’ sound better” ... “It may be helpful to treat the conversation as similar to presenting your case to your boss if asking for a raise”)?

Clients have been left in the dark for too long, but are Canadian advisors that challenged on investment basics? Are they incapable of explaining what a client is paying and how they're doing? An article in Investment Executive magazine’s CRM2 supplement had the urgent sub-title: “Everyone, from client-facing advisors to CEOs, needs to get the necessary training to be ready for CRM2”. I'm starting to think that CRM stands for Clients Raving Mad.

In fighting CRM2 (and now the abolishment of trailer fees), the industry has been consistently telling regulators that everything is okay. No change is needed. Well, given how ill-prepared dealers and advisors appear to be for CRM2, we have unequivocal evidence that things aren't okay.

In light of the CRM2 effort that’s going on, Scott and I thought we’d better do our part to help defenseless advisors get ready. Here’s our primer:

10 Ways to Survive CRM2

1. Always have calming music playing in the background. A spa soundtrack or Kenny G will do.
2. Have a ready list of quick topics to divert the conversation. “How about those Canucks?” Or, “Boy, this weather’s sure been unusual, huh?”
3. When meeting with clients, make sure a doctor or nurse is nearby, or at least someone trained in CPR.
4. Keep a Costco-sized bottle of Tylenol in your desk drawer, or perhaps a bottle of Jack Daniels.
5. Have your assistant standing by the fire alarm. It’s going to be a smokin’ hot summer.
6. Have a puppy in the office. Everybody loves puppies!
7. Take a sabbatical during the summer of 2016 ... "Gone fishing"
8. Reread Dale Carnegie's book How to Win Friends and Influence People.
9. Sell your book of clients to a keen, young advisor.
10. Or if all else fails, keep doing what you’re doing and hope clients don’t notice the increased fee and performance disclosure.