Weekend Reading: Total Cost Reporting Edition
They say sunlight is the best disinfectant. Well, that light is about to shine a whole lot brighter on investment fees.
Starting in early 2027, Canadian investors will see the total cost of owning their investments in a way they never have before.
For years, the fees you pay to own mutual funds, ETFs, and segregated funds have been scattered, buried, or simply never shown to you in dollar terms.
You might know your advisor charges 1% or 1.25% on a fee-based account. What many investors don't realize is that the fund itself also has expenses, including a management expense ratio (MER) and trading costs inside the fund that rarely show up in a way investors can easily understand.
Add it up and a portfolio with a 1.25% advisory fee can easily cost close to 2.5% per year once fund expenses and trading costs are included.
Total Cost Reporting (TCR)
That's about to change. Total Cost Reporting (TCR) is a new disclosure regime set out by the Canadian Securities Administrators (CSA) back in 2023, with CIRO and Ontario's FSRA each passing their own harmonized rules so it applies consistently across investment dealers, fund dealers, and insurers selling segregated funds.
The rules took effect January 1, 2026, and apply to the year ending December 31, 2026. The first enhanced statements will land in early 2027, so your next annual statement is about to look very different.
Here's what's coming. Your current annual statement already shows what you pay your advisor's dealer (that's been required since CRM2, back in 2017). What's new is that it will now also show, in actual dollars, the cost of the fund itself, combining everything into one total.
Take a $500,000 portfolio in RBC Select Balanced Portfolio Series F, a popular fee-based fund, paired with a 1.25% advisory fee.
Series F funds don't pay a trailing commission since they're designed for fee-based accounts. The Fund Facts sheet lists an MER of 0.94%, and once you add a modest trading expense ratio for a balanced fund, the Fund Expense Ratio (FER) lands around 1.00%.
| Before (CRM2) | Starting Jan 2027 (TCR) | |
|---|---|---|
| Advisor/dealer compensation (1.25%) | $6,250 — shown | $6,250 — shown |
| Fund Expense Ratio (FER ≈ 1.00%): management fee, operating expenses, taxes, trading costs | $5,000 — buried in the prospectus as a percentage, not disclosed in dollars | $5,000 — shown in dollars |
| Total cost you actually paid | $11,250 — but only $6,250 of it was ever shown to you | $11,250 — shown in full |
That's the gap.
For years, your annual statement would have shown the $6,250 paid to your advisor's firm. The other $5,000 was being deducted inside the fund every year, but it never appeared on that statement. It's the same portfolio and the same fees that always existed, totalling $11,250 a year. Starting in 2027, you'll see both amounts side-by-side.
Why now? Regulators recognized that many investors overlooked these costs because they were embedded in fund returns rather than charged as a separate line item.
CRM2 solved half the problem in 2017; TCR closes the other half. It also folds in segregated funds for the first time, harmonizing insurance-industry disclosure with the securities side.
What should you expect to feel in January 2027? For a lot of people, this could be the biggest “wait, I paid how much?” moment investing has produced in years.
Even with a Series F fund designed for fee-based accounts, you're looking at over $11,000 a year on a $500,000 portfolio, in hard dollars instead of percentages you can mentally wave away. Passive ETFs, which already tend to run much cheaper than mutual funds, should come out looking pretty good by comparison once everything's laid side by side.
This won't fix high fees on its own. Some investors will look at the numbers and decide the costs are justified. Others may start asking questions or exploring alternatives.
But you can't negotiate, question, or switch away from a cost you've never actually seen. You've been paying these costs all along. Starting in early 2027, you'll finally get the full receipt.
This Week's Recap:
Last weekend reading I shared my thoughts on the best time to start serious retirement planning. Not just saving for a someday, maybe, but working with a financial planner to help you map out the details.
Next, I explained why 54% is all you need to be a great investor (or tennis champion).
On the business side we are now fully booked for new client discovery calls for the rest of 2026. And we're still working through the crush of new inquiries stemming from my appearance on The Wealthy Barber podcast last month.
We're grateful for the interest, but definitely looking forward to things slowing down a bit over the summer. Travel season is almost upon us. We're off to Scotland in early July and then a France-Switzerland loop around the Alps in late July-early August.
Hopefully you all can take some time to rest and rejuvenate (or have an adventure) this summer, and we can get back to business in the fall.
Promo of the Week: American Express Platinum's Boosted Welcome Bonus
Speaking of adventures and travel, if you've got trips on the horizon and some upcoming bills to pay, this might be the week to put those two things together.
We've held the Amex Platinum card for years, mostly for the airport lounge access and the Bonvoy Gold Elite status that comes along with it. But if you're new to the card, right now there's a boosted welcome offer worth up to 170,000 Membership Rewards points:
- 90,000 points after spending $10,000 in the first 3 months
- 40,000 points after spending a total of $45,000 in the first 12 months
- 40,000 points for making a purchase between months 15–17 of cardmembership
That first tier is the catch – $10,000 in three months is a steep ask, and I wouldn't recommend chasing it with spending you wouldn't otherwise do. This card is worth signing up for if you've already got upcoming bills that'll get you there naturally (think annual insurance premiums, home renovations, electronics, or some other big planned purchase).
One important check before you apply: make sure those bills can actually be paid with an Amex. Not everyone takes it. Our home and auto insurance, for example, lets us pay annually by credit card (including Amex) – which made hitting the spend threshold fairly painless (and lucrative).
Offer ends July 28, 2026, so if this is on your radar, now's the time to run the numbers and apply for the American Express Platinum Card.
Weekend Reading:
This Kiplinger article explains how to master the art of spending in retirement.
David Blanchett's research finds that about half of American retirees call their retirement “very satisfying,” and argues that getting there takes more than smart portfolio management – it also means tending to health, social connection, and guaranteed income, not just savings:
“Focusing entirely on wealth (and ignoring well-being), could result in a client accumulating enough wealth to retire, but not enjoying retirement due to poor health or a lack of social connections—winning the wealth ‘battle' but losing the retirement ‘war.'”
What inflation, investment return, and life expectancy assumptions should Canadians use for retirement planning? Here’s what financial planners recommend.
As stock markets soar, defined contribution pension plan holders are seeing their accounts grow, while more conservative defined benefit plans are left behind.
The Wealthy Barber is closing shop – that's right, David Chilton is retiring at the end of the year. I'm excited to see hime in person at the IAFP conference in Winnipeg this fall. His work has meant so much to me, and to millions of Canadians:
Hopefully we'll see more of these stories as Dave does his final victory lap media tour. David Chilton used to read 150 books a year: Here are four of his favourites.
One of the trickier accounts to manage: How a LIRA fits in as part of a broader retirement portfolio (G&M subs).
Finally, active ETFs are growing in popularity, but costs and diversification still make passives ones hard to beat.
Have a great weekend, everyone!
