The Transparency of Total Cost Reporting

What Is Total Cost Reporting?

Total Cost Reporting (TCR) is a new regulatory disclosure requirement that will provide investors with clear, dollar‑based information about the ongoing costs of owning certain investment products. This includes embedded costs within mutual funds, ETFs, and segregated funds, such as management expense ratios (MERs) and trading expense ratios (TERs), collectively referred to as total fund expenses.¹⁻²

TCR is designed to give investors greater visibility into both the direct and embedded costs associated with their accounts.

Why is TCR Important?   

Under the Client Relationship Model – Phase 3 (CRM3), regulators aim to expand cost transparency beyond the direct dealer fees introduced under CRM2.³⁻⁴ TCR helps investors:

• Understand the full costs associated with their investments
• Compare products more easily based on cost information
• Gain enhanced clarity around how ongoing fund expenses impact returns

The new disclosures are intended to enhance investor protection through consistent cost reporting across both the securities and insurance sectors.

Who is Involved in TCR?  

Several industry participants are involved in implementing TCR requirements, including:

• Canadian regulators, such as the Canadian Securities Administrators (CSA) and the Canadian Council of Insurance Regulators (CCIR)
• The Canadian Investment Regulatory Organization (CIRO) for securities dealers
• Investment firms, including managers, dealers, and advisors, who are responsible for delivering TCR disclosures to investors

When does TCR apply?  

The new Total Cost Reporting requirements take effect on January 1, 2026.¹ Costs incurred in the 2026 calendar year will appear in client statements beginning in 2027.

How is Kinsted applying Total Cost Reporting?  

Kinsted’s Pooled Funds are prospectus‑exempt investment funds and are not subject to TCR disclosures. Prospectus‑exempt funds are investment funds available to qualified investors without needing a public prospectus. 5

For clients who hold mutual funds or other securities that fall under the TCR requirements, cost information provided by custodians and dealers will be incorporated into their reporting packages.

We are actively engaged with our custodians and technology partners to understand how TCR data will flow into our reporting systems. As these processes are finalized, we will update our reporting and communications to ensure clients receive clear, accurate, and timely information.
Our goal is to help clients understand the implications of TCR and support them through this transition.

Sources

1 Educators Financial Group. “Total Cost Reporting: What It Is and Why It Matters to You.” Accessed January 21, 2026. https://www.educatorsfinancialgroup.ca/learning-centre/total-cost-reporting-what-it-is-and-why-it-matters-to-you/

2 Investment Executive. “With CRM3 around the Corner, Here’s How Financial Services Firms Are Preparing.” Accessed January 21, 2026. https://www.investmentexecutive.com/news/with-crm3-around-the-corner-heres-how-financial-services-firms-are-preparing/

3 Investment Executive. “How Should Advisors Speak to Clients About Total Cost Reporting?” Investment Executive. Accessed January 28, 2026. https://www.investmentexecutive.com/uncategorized/how-should-advisors-speak-to-clients-about-total-cost-reporting/.

4 National Bank Investments. “Most Frequently Asked Questions About CRM3.” Perspectives. Accessed January 28, 2026. https://www.nbinvestments.ca/perspectives/article/most-frequently-asked-questions-about-crm3.html.

5 Canadian Securities Administrators. National Instrument 45‑106: Prospectus Exemptions. Accessed January 28, 2026. https://www.securities-administrators.ca.

Regards,
Kinsted Wealth