Working with an Investment Advisor

Working with a registered investment advisor is a choice. If you feel you need help or want support in choosing investments and managing your money, a registered investment advisor can work with you to achieve your goals. It’s important to note that an investment advisor that sells securities, such as stocks, bonds, mutual funds, or exchange-traded funds must be registered with a provincial securities regulator.

Always do a background check on anyone who claims they are registered to sell investments so that you can avoid falling for a potential fraud.

There are a number of things you can expect when working with a registered investment advisor.

They should make clear and specific recommendations, and explain how their recommendations will help you meet your financial goals.

This should include explaining the risks involved with every investment they recommend.

They should answer your questions about investment products and strategies. Remember, if you don’t understand something, ask for clarification until you feel comfortable moving forward with an investment.

They should get your permission before buying or selling investments on your behalf, and confirm it in writing …unless you have a discretionary account or you’ve given someone else trading authority or power of attorney over your account.

They should provide information about the fees you pay and the performance of your investments.

And they should keep your personal information safe, send you regular account statements, and meet with you at least once a year to review your information, progress, and update your plan, if appropriate.

Finally, the type of advice you might get from your investment advisor will depend on the type of advisor you’re working with. Make sure you’re working with an advisor who is qualified to offer the type of advice, products, and services you need.

Canadian securities regulators, such as the BC Securities Commission, also play a role in how the client-advisor relationship is conducted.

Regulators recently made rule amendments based on the concept that clients’ interests come first. The reforms will be in full force on December 31, 2021.

In a nutshell, your investment service provider and its registered advisors are required to put your interests first when recommending or choosing investments for you. If there’s a material conflict of interest, they must address it in your best interest. They will also need to do more to clarify what you can expect from them in terms of investment products and services.

More information is available from the BC Securities Commission.