CRM2 – Client Relationship Model, Phase Two

Client Relationship Model, Phase TwoThe Client Relationship Model, Phase Two (CRM2) is an initiative by the Canadian Securities Administrators, an umbrella organization of Canada’s provincial and territorial securities regulators. The idea behind the program is to improve information disclosure to clients of financial services firms regarding the amount they pay for services and how their personal accounts performed. Or as FAIR, the Canadian Foundation for Advancement of Investor Rights says: “How much you made and what you paid.”

In order to implement CRM2, as of July 2016, financial institutions are required to deliver two annual reports to their clients. One report will show how much direct and indirect compensation the firm made from your account. For example, direct charges such as all service charges and commissions will be reported. In another section of this report all indirect compensation a dealer or advisor receives, such as trailing commissions from a mutual fund company will be presented. Note that this report will not calculate the management fees that the manager of a mutual fund or exchange traded fund charges to manage that fund. That number is disclosed in any offering document of a manager as the management expense ratio.

The second CRM2-required annual report financial institutions must deliver will present the performance of the account. This annual investment performance report will show all deposits and withdrawals from the account, the change in value of the account and the percentage returns for the previous year and the prior three, five and ten years. Combined, these annual reports will give investors an improved ability to gauge whether they are receiving good service and performance for the money they are being charged.

Inukshuk Capital Management believes the Client Relationship Model, Phase Two (CRM2) is a step in the right direction to the goal of full transparency in investing. Transparency is one of Inukshuk Capital Management’s priorities with our clients. Management fees are the only way in which Inukshuk Capital Management is compensated and those are fully disclosed on monthly client account statements. Custodial fees and commissions are disclosed monthly by our primary custodian National Bank who is fully compliant with the Client Relationship Model, Phase Two (CRM2) initiative. As well, the management expense ratios charged by the managers of the exchange traded funds we invest in are disclosed in the investment proposals we provide our clients. On the performance side, Inukshuk Capital Management provides quarterly reports to our clients and National Bank will deliver the required annual report along with monthly statements. Our clients have all the information they need to determine whether they are getting value for their money.

Inukshuk Capital Management is an independent investment manager committed to full transparency and is fully compliant with CRM2. We are focused on delivering cost-effective systematic ETF strategies designed to maximize risk-adjusted returns. We use a disciplined, quantitative approach to design tailored portfolio management solutions for individuals and institutions. Inukshuk Capital Management is also the manager of the Inukshuk Opportunities Fund LP, a systematic, multi-asset class, long/short global investment fund. Accredited investors can learn more about the fund here.

Inukshuk Capital Management Inc. is incorporated under the laws of Canada and is registered as an Investment Fund Manager, Portfolio Manager and Exempt Market Dealer in Ontario. ICM’s office is located in Toronto, Ontario.


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