Helping clients interpret costs and overcome loss aversion
When clients receive their 2026 year-end statements, they will see Total Cost Reporting (TCR) disclosures for the first time. While TCR doesn’t change the actual cost of investing, it does change how those costs are presented. Rather than percentages alone, clients will now see a more complete picture, including clear dollar amounts - figures that can immediately stand out.
As costs become more visible, they may also feel more significant. In this article, we’ll explore how this shift in presentation can shape client perception, including the role of behavioural biases like loss aversion, and how you can guide more balanced, productive conversations.
Why this matters: loss aversion and visible costs
According to The Decision Lab, loss aversion is the “cognitive bias where the emotional impact of a loss is felt more intensely than the joy of an equivalent gain.”
In a TCR environment, this becomes especially relevant. When costs are shown as clear dollar amounts, they become more visible and harder to ignore. As a result, clients may focus more on what they’re paying, even if their portfolio is performing well.
TCR doesn’t change the cost, but by making it more tangible, it can make those costs feel more significant than they did before.
What this means for advisors
As TCR comes into effect, client conversations may start from a different place.
Instead of leading with outcomes or long-term progress, clients may focus first on cost. Clear dollar amounts are easy to spot, and once noticed, they can shape how the rest of the statement is interpreted. For example, a percentage-based fee may have felt abstract, whereas a $3,500 cost can feel much more immediate.
This difference matters. When a number is more visible, it’s more likely to influence what clients focus on and how they evaluate value. In some cases, a clearly displayed cost may even feel like a loss, simply because it’s presented in a way that’s hard to ignore.
Being aware of this shift can help you guide conversations more effectively.
How to guide the conversation
As an advisor, you will play an important role in helping clients understand TCR disclosures. The goal is not to minimize costs, but to ensure they are viewed in the right context.
Here are a few practical ways to support upcoming cost conversations:
1. Set expectations early
Before clients receive their disclosures, explain:
• What TCR is designed to show
• Why costs appear in dollar terms
• What is included in those figures
When clients know what to expect, the information is easier to understand.
2. Provide context around the numbers
A single cost figure can be difficult to interpret on its own.
Help clients understand:
• Cost relative to the size of their portfolio
• Cost over time, not just over the span of one year
• What services and support are included
This helps ensure that one number does not carry too much weight.
3. Connect cost to the value of advice
TCR creates an opportunity to clearly explain what clients are receiving.
This may include:
• Financial planning and goal setting
• Portfolio construction and monitoring
• Tax-aware strategies
• Ongoing guidance and support
Framing cost alongside value helps clients see the full picture.
4. Keep the focus on long-term outcomes
Cost is important, but it is only one part of the investment experience.
Bring the conversation back to:
• Progress toward financial goals
• Long-term strategy
• Consistency over time
Final thoughts
TCR brings greater clarity to investment costs, but with increased visibility comes a shift in how those costs are perceived. Because of loss aversion, clients may place more weight on these figures than on their overall results.
By preparing in advance and providing clear context, you can help keep conversations focused not just on cost, but on outcomes, value, and long-term progress. In this environment, the value of advice goes beyond the numbers, it lies in helping clients understand what those numbers mean.
Explore the Equitable TCR Hub to start preparing today.