Communicate regularly with your advisor and ask questions if you have concerns.
There are rare cases where an investment advisor intentionally mismanages or even steals clients’ money. For more information on working with a registered investment advisor, visit this section.
If you experience or are concerned about one of the issues below and it hasn’t been resolved to your satisfaction, you should report it. Our Report Fraud or Misconduct section details the steps you should take when filing a complaint against a registered investment advisor.
Warning Signs of Advisor Misconduct
Pay attention to signs indicating your advisor might be committing misconduct:
- Offers of lucrative private deals. Registered advisors should not be selling or recommending “off-book” or “secret” deals to clients.
- High-pressure sales. An advisor should not pressure you into buying an investment, or bully you into an uncomfortable investment strategy.
- Request for direct payment. When you write a cheque for investment purposes, you should always make it out to the firm that holds your account, not the advisor or a company that they own.
- Errors on your statements. If you see questionable investments, or you think there is money missing from your account, ask your advisor to explain and fix it.
- Your statements don’t look right. When there is a discrepancy, or something doesn’t look right, look into it right away and ask for clarification.
- Unregistered dealing. Check that your advisor is registered to recommend the products they are offering. If they are not registered, or if you are unsure, contact the firm or a securities regulator before making an investment decision.
- Churning. Excessive trading in your account to generate higher commissions for the advisor and their firm.
How to Take Action if You Suspect Misconduct
1. Draw up a list of questions. An advisor who is doing something wrong may make excuses or offer to make things right. This list will help you stick to key issues.
2. Document your communications. Email is an effective form of communication, as it creates a record of the conversation. When you cannot use email, take notes or record the conversation.
3. Speak to the investment firm or make a complaint. If you get unsatisfactory answers to your questions and you feel there is reason for concern, you will need to talk to the investment firm your advisor works for, and possibly, a securities regulator.
Reporting Advisor Misconduct
Even though you depend on your financial advisor to help you make investment decisions, it is essential that you monitor your portfolio and keep an eye on their work. If you suspect anything is wrong, ask questions. If the advisor does not give satisfactory answers, or you still have doubts, you should collect any documentation or communications you have, and begin the complaint process.
The Report Fraud or Misconduct section outlines what you need to do if you want to pursue this course of action against an advisor. If you have any questions or concerns, you can also contact BCSC Inquiries via email or phone.