Do you know how much you're paying for your investments in Canada?

Whether you're investing for your retirement, your kids' college fund or a fabulous vacation, you need your investments to work for you. That means knowing exactly how much you're paying for the management of your investments. You may think this is easy to figure out just by looking at your statement, but the reality isn't that simple.

In the past, Canadian financial firms weren't required to disclose the details of their investment fees, which often made it difficult for investors to tell what their total costs were. Some experts believe this lack of transparency is one reason Canadians pay some of the highest mutual fund fees in the world.

But change is coming soon with the Client Relationship Model — Phase 2. CRM2 is a series of investment reforms that are being phased in over three years by Canadian regulators to improve disclosure. “CRM2 responds to a need for much greater education and transparency in the industry,” says Silvio Stroescu, vice president of deposits and investments at Tangerine. “Too many Canadians still believe they're not paying fees for their investments.  Going forward, Canadians will be more empowered with the kind of knowledge they need to make smarter decisions with their investments, and this is something we have always advocated for at Tangerine.”

For the first time ever, in July this year, your financial firm will have to provide two annual reports that detail:

1. What you're paying your dealer in dollar amounts. The Management Expense Ratio (MER) of an investment fund is made up of two main components: the management fee the fund company charges for the administrative and operating costs of running the fund, and the trailing commission the fund company pays to your investment dealer. CRM2 requires your investment dealer to send you an annual report summarizing their earnings such as trailing commission(s), in actual dollars, as well as any other earnings like deferred sales charges or referral fees. This report will also provide a summary of other account charges like annual administration and transaction fees – all of which will help you see how much you're paying for the services you're receiving.

2. Your financial firm will also have to disclose your personal rate of return. Previously, firms only had to disclose the rate of return for the fund overall but with CRM2 your statement will provide your personal investment returns for the previous year and since opening your account. Now you'll be able to tell if you're actually making money or not.

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