Look for a registered advisor
Working with a registered advisor is the only way to ensure that the laws governing advisor conduct can protect you. If you make the mistake of allowing an unregistered person to advise you about your investments, you forego the protection of those laws. You also run the risk of involving yourself with someone whose intent is not to help you achieve your investment goals, but only to sell you investments, suitable or not.
Choosing a well-known bank, investment fund, or brokerage firm is no guarantee that you will receive the services and advice you need, but it should ensure that you are dealing with a registered advisor at a legitimate company with assets available if something goes wrong.
Two ways to find out if your advisor is registered
- Search the National Registration Search database hosted by the Canadian Securities Administrators (CSA). This database contains the names of all individuals and firms registered in Canada to trade in, or advise about, investments, with the exception of those registered solely with the Ontario Securities Commission (OSC). OSC registration information is available on the OSC Registrant List.
- Contact BCSC Inquiries. We welcome your inquiries about registration, but we also encourage you to do your own registration check online. Call us if you have unanswered questions, or you find that someone you want to check is not listed in the database.
What services do you want?
Once you’ve made the commitment to work with a registered advisor, knowing the services you need will help you narrow your search for an investment advisor who’s right for you. Do you want an advisor who will:
- Provide a full range of products and services, including research, annual reports, and other investment documents or information and offer a variety of fee types? This is a full service investment firm
. - Only provide diversified investment products? This is a mutual fund salesperson or bank employee.
- Carry out your instructions for a minimal fee, without providing advice? This is a discount broker .
- Manage your portfolio full-time for a fee and make investment decisions on your behalf? This is a portfolio manager . Portfolio managers typically work only with high net worth investors.
What you need to know about financial planners
A good registered advisor will conduct an in-depth interview with you to gather information about your income, expenses, assets, liabilities, goals, and risk tolerance. They need this information to fulfill their Know your client obligations and to determine whether the products they recommend are suitable for your portfolio. They may also use this information to prepare a written financial plan specifically for you, but this is often not part of the service provided by those who buy and sell investments. If you want a financial plan to detail a program for achieving your investment goals and strategy, you may want to hire a financial planner.
Looking for a financial planner with the initials CFA, CFP, PFP, or RFP after their name. This is your best assurance of finding one who has passed exams, is taking continuing education, and complies with a code of ethics.
Fee-only financial planners charge only for the time they spend working for you and have nothing to sell. Others may offer their planning services for free and receive compensation from the products they sell you. As long as they are registered to buy and sell investments, there is nothing wrong with this; however, there may be a conflict of interest between your best interests and their potential compensation. Using the Worksheet for choosing an advisor can help you to satisfy yourself about how they manage that particular conflict of interest.