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With Total Cost Reporting (TCR) coming down the pipeline on the Segregated Fund side, we want to equip you to have the conversation with your clients. I’ve attached a client friendly piece that explains what TCR is, in a simple way you can share with your clients.

As we receive more clarity on the regulatory requirements for statements, we will be providing a mock statement.

This way you can show your clients what to expect when they receive their new statements come January 2027.

If you’re looking to include a “Reasons Why” letter in your practice as you do client reviews, we have an editable framework letter on our website.

Forms and Materials for Advisors - BMO Insurance. You can also directly access it here: Reasons Why Letter

If you’d like to discuss how to prepare your client’s for the TCR discussion, please click here to schedule a time to connect: Book Meeting with Me

If you’re still looking for more information on TCR, please see below:

What Will Be Included on Client Statements?

Starting with statements delivered in early 2027 (covering the 2026 calendar year), clients will see:

1. Total Cost of Ownership

• The sum of all embedded fund 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.
  • These will include instances where we withdraw units to directly pay a cost, for BMO Insurance these include:
    • Death Guarantee Reset Option (DGRO) rider on the 100/100
    • Death Guarantee Reset Enhancement (DRGE) rider on the 75/100
    • Client Name Class F accounts

2. Fund Expense Ratio (FER)

• The FER (MER + TER) will be shown as a percentage for each segregated fund held.
  • Management Expense Ratio (MER): The percentage covering management and administration costs.
  • Trading Expense Ratio (TER): The percentage covering the costs of buying and selling investments inside the fund.

3. Performance Reporting

• Personal, money-weighted rates of return since contract inception and for standard periods (10, 5, 3, and 1 year).

4. Guarantee Information

• Maturity and death benefit guarantees, including dollar values and dates.
• For contracts with guaranteed withdrawals: annual guaranteed withdrawal amounts and related details.

5. Fund Details

• For each fund: name, market value, deposits/withdrawals, number of units, FER, and whether deferred sales charges apply.

6. Explanatory Notes

• Plain language explanations of fees, how they affect returns, and actions clients can take.

What Will Not Be Included?

• Advisor Compensation Breakdown: Statements will not show a separate breakdown of upfront commissions or trailer fees paid to advisors, except for costs paid directly by the policyholder and not included in embedded management costs.
• New Funds: Funds less than 12 months old are exempt from TCR reporting (a footnote will be provided).
• Direct Advisor Fees: Any fees paid directly to an advisor (not through the insurer or fund) are not included in the total cost figure.
  • Note, Client Name Class F is paid through the insurer.  Nominee is not.

Key Points for Advisors

• No New Fees: TCR does not introduce new or additional charges; it simply discloses existing costs more transparently.
• Dual Reporting: If segregated funds are held in a dealer account, clients may receive both insurer and dealer statements, with slight differences due to rounding or data sources.
• Scope: Applies to most segregated funds, mutual funds, ETFs, and some foreign funds purchased on an exchange or transferred into a Canadian account.