Total cost reporting (TCR/CRM3)

What is TCR?

TCR (often called CRM3) represents the next evolution in Canadian cost-transparency standards. It expands fee transparency by requiring insurers and dealers to give clients a comprehensive, dollar-based view of all costs, including embedded fees associated with segregated fund investments. The intent is to help clients clearly understand what they pay, support more informed conversations and help reinforce the value of advice.

Timing to keep in mind

• January 1, 2026: Industry begins collecting daily cost data for in-scope products.
• December 2026: Insurers include fee breakdowns on annual segregated fund statements. 

What’s in scope?

In scope: Segregated funds, mutual funds, ETFs, scholarship plans, and closed-end funds under prospectus. 

Out of scope: Individual securities and most exempt or structured products. Statements may include a disclosure note when costs aren’t reported.

What clients will see

• Total cost of ownership: This includes the sum of all embedded expenses (management fees, operating expenses, trading costs) and direct charges (front-end loads, advisory service fees, transfer/switch fees, reset fees, etc.) shown in dollars.
• Fund expense ratio (FER) for each fund held during the year. The FER equals the management expense ratio (MER, or the percentage covering management and administration costs) + trading expense ratio (TER, or the percentage covering the costs of buying and selling investments inside the fund). 

• Remember: These are existing costs made more visible, not new charges. 

How to position the change with clients

1. Start early: Consider taking clients through a proactive walkthrough before their first updated statement arrives. This may prevent surprises and build trust. Keep it simple, then go deeper as needed. 
2. Reframe to value: Link the costs to outcomes clients care about: Risk control, income reliability, progress to goals, behavioural coaching, etc., not just product price tags. 
3. Provide information ahead of time: Send clients information about total cost reporting. Define FER, show “total annual cost,” and explain why fund expenses appear even when clients didn’t write a cheque. Include a short note that fund expenses are deducted within the fund and already reflected in returns. 
4. Set expectations: Let policy holders know they’ll see fee details in their  December 2026 statements.

Sample script

“Starting with the 2026 calendar year, your annual statement will show your total cost in dollars for the funds you owned. You’ll also see a fund expense ratio for each fund, which combines management and trading costs. These costs aren’t new — they’ve always been part of investing and already reflected in your returns. The goal is to make them clearer so we can confirm you’re getting strong value for your plan.”

Anticipate these client questions

• “Are my fees going up?” No. TCR changes how costs are reported, not what you pay.
• “Why do I see a cost even if I didn’t pay anything directly?” Fund expenses are deducted within the fund throughout the year and now get added up and shown in dollars.
• “What’s FER and why does it matter?” FER = MER + TER. It helps compare ongoing fund costs alongside performance and risk.
• “Which of my accounts are affected?” In scope holdings (mutual funds, ETFs, seg funds, etc.) are included. Many exempt/pooled funds and individual securities are not. We’ll flag any exceptions on your statement. 

Advisor checklist (practical steps for the next 90 days)

• Identify fee-sensitive households and schedule TCR previews.
• Review model portfolios through a net of fees lens rather than aiming for the lowest sticker price.
• Align language with insurers for seg fund clients about the December 2026 statement experience. 

Resources you can use now

• Client TCR explainer
• Reason why letter
• Explainers
  • BMO Insurance: Segregated Funds
  • What is a segregated fund?
  • Wealth transfer challenges: how segregated fund solutions can help
  • Creditor protection: shielding wealth with segregated funds - BMO Canada