You have looked at your bank account and made the decision it is time to invest. If you are looking to find an advisor you can trust to instruct you on decisions regarding where to put your money, you should go through a number of steps to ensure the advisor is a proper fit for you.
This may seem time-consuming and difficult, but making an informed decision about who is going to help you manage your investments is an important decision that can impact how you build wealth and save for the future.
Finding an Investment Advisor
Research is the first step to make sure you are finding someone who is best suited for you. You can ask around your family and friends regarding their advisors, but don’t just take their advice. Using the Internet, look at different registered firms and advisors. Read biographies and understand the services these firms and advisors provide to individual investors.
Before working with an individual investment advisor, it is important to conduct a background check. This can be done in four simple steps:
- Check registration using the Canadian Securities Administrators (CSA) National Registration Search to determine if an individual or firm is registered.
- Check disciplinary history to see if the investment advisor or firm has ever been disciplined for bad practices. You can use the CSA Disciplined List or contact BCSC Inquiries and we will check it out for you over the phone.
- Search the name of the investment advisor you are interested in. The Internet can be very informative.
- Interview the prospective investment advisor.
What does a Registered Investment Advisor Mean?
In general, if you are purchasing securities, the person selling and advising you on the product must be registered. Understanding registration is important because it helps protect you. An individual or a firm can only be registered if they are properly qualified and comply with investor protection laws.
What Does the Advisor’s Job Title Mean?
When researching an investment advisor, you may be bombarded with an overwhelming amount of titles. Many of them might be something you have never seen before.
It is important to understand these titles and designations to make an informed decision about who you want to work with.
Interviewing the Investment Advisor
You have completed your research, you understand your chosen advisor’s title, and you have checked the investment advisor’s registration; now is the time to conduct the first interview.
The interview is similar to a first date; this is the moment where you see how well you two work together. You need to arrive to the interview ready to ask questions so make sure to prepare before the meeting.
Some questions that may be useful to ask include:
- What investment business are you registered to conduct?
- What professional qualifications do you have and what do they mean?
- How long have you been advising clients on their investments?
- How are you compensated and what fees do you charge?
- Can you tell me about how you have worked with clients like me to achieve their financial goals?
- What is the firm’s dispute resolution policy?
- Are you a good match for me?
A good recording tool for the questions you need to ask is the CSA Before You Invest workbook.
Finding an investment advisor who you work well with is of the utmost importance to a successful investment future. Understanding their qualifications, registration, and work experience can help start a healthy relationship.
If you have any concerns about a person or company offering an investment opportunity, please contact BCSC Inquiries at 604-899-6854 or 1-800-373-6393 or through e-mail at [email protected]. You can also file a complaint or submit a tip anonymously using BCSC’s online complaint form.
InvestRight.org is the British Columbia Securities Commission’s investor education website.
The British Columbia Securities Commission (BCSC) today released the Smarter Investor Survey, national research that examines client-advisor relationships in Canada, and introduces a new lens for understanding how personality affects Canadians’ investment decisions. The study identified five distinct personality types among survey takers, each representing a common set of traits known in academic circles as the […]
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