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The national registration search contains the names of all individuals and firms who are registered to sell securities in Canada.

You ASC'd Blog

We’ve created this blog to present you with answers to some of the more common questions we receive from investors. We'll have different subject matter experts blogging about what they know best and we'll update it as new blog topics arise. We hope you'll find it interesting and helpful.

  • World Elder Abuse Awareness Day - June 15
  • World Elder Abuse Awareness Day - June 15

    Elder Abuse Investment Fraud

    Seniors are targets for investment fraud for a few reasons. Fraudsters expect that many seniors will have put away a hefty nest egg to live off of during retirement. They also exploit the fact that seniors (up to 20 per cent of all individuals) experience some level of diminished capacity as they age, and that seniors can often experience feelings of loneliness. Fraudsters will prey upon this vulnerable population and manipulate them to earn trust and loyalty.

    What does investment fraud look like? There are a few common tactics that are used when approaching senior citizens:

    • Affinity fraud: investment opportunities that become available via people you know and trust through organizations, clubs, communities that seniors are a part of.
    • Cold calls: aggressive and persistent sales people who pitch “exciting” and “lucrative”-sounding investment opportunities.
    • Investment seminars involving a free lunch: these are usually sales pitches for an investment opportunity which often feature a free lunch as a means to lure people in. The senior is often made to feel obliged to invest because (s)he received the free lunch.

    Each of these types of fraud aims to target a need, circumstance or trait specific to seniors and, unfortunately, it works a lot of the time.

    Children of seniors, or even those who know and are close to a senior who could be at risk of being targeted are encouraged to start a conversation (even though talking about money can be awkward) to ensure that their parents/loved ones know what the red flags are and can identify them if they’re approached by someone/something suspicious. Simple and casual conversation starters can often lead to information that might tip you off to some odd behaviour that can be dealt with before it’s too late. Here are some suggestions to get your loved ones talking:

    • Who are you banking with these days?
    • I’ve recently seen an interesting article in the paper, let me show you!
    • Are all of your accounts with the same bank?
    • Do you invest?
    • Do you like your advisor? Are they friendly?

    If in fact a fraud has occurred and your loved one has lost money to a scammer, it can be difficult for them to speak up and say something. They may be embarrassed that they fell for the sale or in the case of affinity fraud, they may not want to get their friends, family or community members in trouble. It is common for there to be a level of denial when a large sum of money has been lost. Seniors should be encouraged to come forward and speak about these situations so that the fraudster can’t prey on any more victims.

    If you, or someone you know has been affected by or approached with a potential scam, there are resources available to help. Checking registration of a suspicious person or organization via the Canadian Securities Advisors website as well as reading materials via the Alberta Securities Commission website can be good ways to educate yourselves and the ones you love.

    Helpful links

    Red Flags of investing fraud

    Affinity Fraud

    Top ten investing mistakes


    What mom taught us about money

    Money basics

    "Don't run with scissors."

    "Keep your hands to yourself."

    "If you could stay out last night, you can get up this morning."

    There are pieces of ‘Mom wisdom’ that are so common they are universal. Looking back as adults, some are funnier, some are more practical, but all are good advice. Here are lessons that I learned from my Mom about money.

    Live within your means – Growing up, I naturally wanted the newest toys and whatever trendy clothing my friends at school were wearing. Sometimes I got that cool new coat or Barbie doll and sometimes I didn’t. It took me a long time to understand that when my mom said “we can’t afford it” she wasn’t being mean, she was teaching me to live within my means. My mom separated needs from wants so she didn’t spend money she didn’t have.

    Know where your money is going - Taking into account her salary and expenses, Mom developed a realistic budget to keep track of where her money was going so she didn’t overspend. Now she’s into her retirement, and I understand why she had extra money to help with my wedding – it was in her budget! Taking control of your spending and knowing where your money is going puts you in charge and reduces stress.

    If it sounds too good to be true, it probably is - This lesson was important to learn because no matter how grown up you are, it’s easy to get your hopes up when you hear about something new and exciting, especially when the advertising is compelling. Just like the cookies coming from your Easy Bake oven didn’t come out like the ones on TV, investments that promise high returns with no/low risk aren’t real either.

    Little things add up – Many busy families eat out several times per week – not us! My mom taught me that buying lunch or coffee might be a small expenditure, but do it daily, and it adds up. The money you save by not doing these things daily can be quite significant and used for better things. Thanks to compound interest, that $5 a day has the potential to fund your retirement if you start investing it early enough in a TFSA or RRSP.

    Just because you have the money doesn’t mean you need to spend it - Just like my mom wouldn’t let me have anything I wanted, she would sometimes say no to a night out with friends or new pair of shoes for herself. Before a purchase, she would always ask “do I really need this right now?” My mom taught me that if you have the money, it’s ok to treat yourself on occasion, but don’t do it just because you have the financial means.

    Work for what you want - My mom always saved for big ticket items, from a new appliance to a renovation. I would see her start to cut back on certain things months before, so when the time came to make that big purchase, she wouldn’t have to go into debt. To this day, whether I’m going on a trip or buying a car, I always start saving in advance. I learnt from my mom that planning and saving ahead is key.

    Be honest with yourself – I learned from my mom to always be honest with yourself when it comes to finances and money. If you have an unexpectedly expensive month, don’t ignore it and keep on spending - recognize it and rein in your spending next month. Create a plan to get back on track. The longer you wait to do this, the worse the debt will become and no one likes debt hanging over them!

    Helpful links

    Budget and Planning Tools

    Money-Saving Tips

    Financial Consumer Agency of Canada

    Office of Consumer Affairs, Industry Canada


    Don’t let cold calls put your money on ice

    Cold Calling fraud

    Cold calling is defined as an unsolicited phone call or visit to an individual trying to sell goods or services. One of the many ways Albertans are approached with potentially fraudulent investment opportunities is via cold call.

    Boiler room scams are a common type of fraud. Fraudsters set up makeshift offices, known as “boiler rooms” where they cold call potential investors. If the person sounds interested, the scam artist will send them an information package about the investment opportunity. Often, the packages look professional but are filled with false information.

    Like a true salesperson, the fraudster will call you back and continue to try to sell you on this “too-good-to-be-true” opportunity. The opportunity will often be related to a sector of the economy that is currently getting attention in the news. This is designed to make it sound like a good investment, but in reality, the sales pitch is mostly based on false information or the investments may not even exist.

    Pressure from a smooth-talking scam artist does compel some to invest on the spot. Once an investment is made, the investor will likely never see their money again. Boiler rooms disappear as quickly as they are set up.

    Knowing how to recognize a cold call before you pick up the phone is a good first step to protecting yourself. Red flags indicating that a cold call may be a scam include:

    • Caller is presenting you with an international investment opportunity.
    • Caller tells you that this investment opportunity is exclusive and is time-sensitive.
    • Caller is an aggressive smooth-talker.
    • Caller tries to pressure you into immediate action.
    • Caller is asking you to send them money through a wire service.

    Protect yourself:

    • Do not take immediate action, Check First. Do your own research to ensure that the person who is calling you and the company they are from are legitimate.
      • Check to see if the salesperson is registered with the Alberta Securities Commission or the Investment Industry Regulatory Organization of Canada.
    • Do not give out any personal or sensitive information over the phone – a legitimate caller would not ask for this type of information over the phone.
    • Report the scam – If you believe that a cold call you received may be a scam, report it to your local securities regulator.

    Cold call scams aren’t limited to investments

    Knowing what a cold call is when you pick up the phone is a good first step to protecting yourself. Other than ‘boiler room’ investment frauds, common cold call scams include ‘computer repair’ scams and ‘grandparent’ scams.

    Helpful links

    CheckFirst website

    Reading Materials

    Canadian Anti-Fraud Centre


    The CheckFirst Café hit the road for the Calgary & Edmonton Home & Garden Shows

    Fraud Prevention

    The ASC was busy over Fraud Prevention Month, serving coffee, tea and investor education to visitors at the Calgary and Edmonton Home & Garden Shows. Over 60,000 visitors attended each of these shows – perfect locations for the ASC to meet and educate a large number of Albertans!

    Our booth had a café theme and at each show we served approximately 2,400 cups of tea and coffee. Between both shows, we gave out a total of 10,000 home-and-garden themed education promotional items. We also had an iPad station set up where visitors could take our quiz to test their investing knowledge.

    At both shows, we connected with many Albertans, educating them on the importance of checking first before making an investing decision and where to go for free tools and resources to help them become more informed and educated investors.

    We reminded Albertans of the importance of using the National Registration Search to check the registration of the person or company offering them an investment and that the ASC is here to help – our website, checkfirst.ca is full of free and useful information on investing, including suggested steps Albertans can take to help them make educated investing decisions.

    In case you missed us at the Home & Garden Shows, you can visit checkfirst.ca anytime to access all of the free ASC resources and tools. See below for some photos of the Calgary Home & Garden Show. Our booth was designed by Everbrave Branding Group, who also took the photos below.

    Fraud Prevention Check First

    Fraud Prevention Check First

    Fraud Prevention Check First

    Fraud Prevention Check First

    Helpful links

    CheckFirst website

    Reading Materials

    Everbrave Branding Group


    Recap: The CheckFirst Cafe takes over Cafe Rosso!

    Fraud Prevention Check First

    Just over two weeks into Fraud Prevention Month, the ASC has been on the move with the CheckFirst Café, popping up at the Calgary Home & Garden show and taking over Café Rosso on Stephen Ave in downtown Calgary.

    On Thursday, March 5 over 300 Café Rosso visitors were treated to Fraudaccinos, Lost Dreams Lattes, Scammer Scones and Moneyless Muffins, all courtesy of the ASC. ASC staff were on hand to chat with Café visitors and educate them about how to avoid getting “burned” by fraudulent investments and the importance of doing your homework before making a decision to invest.

    Local Calgary photographer Neil Zeller captured the event. Some highlights of the Café takeover are included below.

    Fraud Prevention Check First

    Fraud Prevention Check First

    Fraud Prevention Check First

    Fraud Prevention Check First

    Fraud Prevention Check First

    Helpful links

    CheckFirst website

    Neil Zeller Photography


    What is the ASC up to for Fraud Prevention Month? Check out our blog to find out!

    Fraud Prevention Check First

    As part of Fraud Prevention Month, the ASC will be bringing the CheckFirst Café to the Calgary and Edmonton Home & Garden Shows. It will be a spot where visitors can take a break from planning their next home renovation to have a coffee on us and learn the importance of doing their homework before making an important investing decision, and about the investor education tools and resources that the ASC has to offer.

    Calgary Home & Garden Show: Thursday February 26 to Sunday March 1, 2015 at the BMO Centre & Corral, Stampede Park.

    Edmonton Home & Garden Show: Thursday March 19 to Sunday March 22, 2015 at the Edmonton Expo Centre.

    On Thursday, March 5 the CheckFirst Café will take over Calgary’s popular Café Rosso on Stephen Avenue, where ASC representatives will be present to offer customers ‘Lost Dream Lattes’, ‘Fraud-accinos’ and other complimentary investment-themed early morning pick-me-ups, while providing information on how to ‘CheckFirst’ before investing.

    Café Rosso – 140 8 Ave SE, Calgary. March 5, from 7 to 10 am.

    Helpful links

    Calgary Home and Garden Show

    Edmonton Home and Garden Show

    Café Rosso


    Smart money resolutions to start the new year off right

    NewYear Resolutions Money
     

    As the season of gifting and celebrating comes to a close, many people start thinking about doing things differently in the new year. Common resolutions range from going to the gym more often to tackling something you’ve never tried before – but how often do we make resolutions and set goals to do with our personal finances?

    We’ve compiled some simple new year’s tasks to help you get organized and be smart with your money in 2015.

    Conduct a personal financial audit: Do you know the balance of your RRSP account? Do you have bank accounts or investments with multiple financial institutions? If so, which ones? Were there major life changes in the last year that caused you to change your address or last name? Are those reflected in your account statements?

    You can’t know if you need to make any changes until you know the facts of your current situation. January is a perfect time to take stock of all of your bank accounts and investments. Check to see how well your investments are doing and see if there is a need to reallocate your money. If you have multiple accounts with different financial institutions, think about how often you use them all and the purposes they are serving. You may find that some accounts could be closed or combined – simplifying your finances makes them easier to manage overall, according to Forbes.com’s 7 Financial New Year’s Resolutions You’ll Actually Keep.

    Depending on your financial knowledge, January may also be a good time to review your investments with a financial adviser to make sure that your hard-earned money is invested in a manner that suits your lifestyle and goals (both long- and short-term). For more information on what a financial adviser can do for you and what to look for, see Working with a financial adviser and Questions to ask when choosing a financial adviser.

    If you are new to the investing world, consider taking a local class such as Mount Royal University or Metro Continuing Education’s The Basics of Investing. It’s never a bad idea to make sure you’re investing wisely and safely.

    Budget for the future: What are your short- and long-term financial goals? Creating a budget can help you visualize exactly how much money is coming in/going out each month. Once you know these numbers you can allot an appropriate amount to be put towards savings. A good tip is to pay yourself first. Make your first payment every month is into your own savings account. If you wait to pay yourself, it’s more likely that you will spend the money elsewhere.

    If you don’t already have a savings account, now is the time to get one. Whether the end goal is a trip to Hawaii or for retirement, it is never too early to have a savings plan. You may not know what the future holds, but you won’t regret having money in the bank when you get there. Which brings us to our next task:

    Plan for the unexpected: Do you have money set aside for a rainy day? Setting up an emergency fund (separate from savings) is a smart way to handle unexpected financial setbacks. What if your car suddenly breaks down or your furnace needs to be replaced in the dead of winter? If you’re prepared, these bumps in the road can be easily navigated without causing you financial stress.

    Helpful links

    Finding a Financial Adviser

    Investing Basics: Getting started

    Money-Saving Tips


    Christmas is the season of giving...and sometimes taking, unfortunately. Watch out for these scams this holiday season

    Holiday Scams and Frauds
     

    The holiday season is in full swing, and many of us are preoccupied with a flurry of spending, celebrating and giving – and this busy-ness often puts us at greater risk for holiday scams. Don’t let yourself be too distracted -- protect your financial well-being by being aware of some common scams and using the following tips to have a financially safe and responsible holiday season:

    Charity scams: Many of us feel more generous during the holiday season and that can leave us vulnerable to scams masquerading as charities. Before donating, do some research on the charity (especially if you’ve never heard of it, or are uncomfortable with the tactics the organization is using to get you to donate) and confirm that it is registered by checking here.

    Be mindful of where you use the strip: Credit cards with magnetic strips are very easy to copy, then create a duplicate of the card and gain access to your credit. Some warning signs of this scam are:

    • A cashier takes your card out of sight to process your payment
    • You are asked to swipe your card through more than one machine to pay for your purchase
    • You notice a device attached to the card slot of an ATM

    If possible, pay for your holiday purchases with a card that has chip and PIN technology or with cash.

    Keep an eye on your credit: Most of us have a much longer credit card statement in December due to all of our holiday shopping and celebrating. Carefully check your on-line credit card statement daily over the holidays for any suspicious activity. Be sure to look for small charges on your statement as thieves often test the validity of credit cards by charging small amounts ($1 and $2), which the card holder will often not notice.

    Data breaches can affect your online shopping: You may be aware of the data breaches that affected top retailers earlier this year. This means that criminals may have access to millions of consumer’s emails and may target those consumers with phishing scams to obtain more information. Be aware of any fraudulent emails claiming to be from reputable retailers that request you to verify any personal or financial information.

    Choose your gift cards carefully: Always buy gift cards from established retailers that are on display behind the counter. Gift cards that shoppers have access to are vulnerable to scammers who have the technology to read and store the unique serial numbers. Scammers will wait until the card has been purchased and is activated to start shopping – on your dime. Check the condition of the gift card to make sure it has not been tampered with and includes a gift receipt with the card indicating the card’s value.

    Enjoy a safe, happy and scam-free holiday season!

    Helpful links

    Canada Anti-Fraud Centre

    RCMP Scams and Fraud information


    Find mutual fund statements confusing? ‘Fund Facts’ can help!

    Financial literacy Mutual Funds
     

    Did you know that November is Financial Literacy Month? There’s no better time to polish up your financial knowledge so that you can understand and make educated choices in your investments – and protect your money.

    The reality is that it can sometimes be confusing to read the mutual fund reports you receive from your advisor/dealer. And it can be difficult to pick out the key information you need from other documents. Recognizing this, the CSA have taken action to support better understanding of these reports.

    As part of Financial Literacy Month, the CSA has launched a free, interactive tool to help investors make sense of their mutual fund statements – the CSA’s ‘Fund Facts’. Fund Facts documents are written in plain language that highlights key information about a mutual fund that CSA research identifies as important to investors. By using this tool, investors can discover more about their mutual funds by taking a guided tour of a sample Fund Facts document. Here they can learn to easily identify a fund’s principal investments, past performance, risk rating and cost to investors.

    Dealers are required to deliver the Fund Facts document to mutual fund investors within two days of purchase.

    Fund facts is one aspect of financial literacy. But there are many more areas to read up on, such as:

    Whether you are a new or experienced investor, the ASC has a wealth of information to help Albertans increase their financial literacy. Before you invest, make sure you know what it is you’re investing in and increase your financial literacy with the help of the ASC and CheckFirst.ca.



    For more helpful information

    Investor Resources

    Investment Basics


    Trick or Treat? The ASC helps Albertans learn how to avoid being 'tricked'

    Fraud Prevention Check First
     

    According to a recent ASC survey of Albertans, about 30 per cent of individuals believe they have been approached with a potentially fraudulent investment. Yet, two-thirds of Albertans with investments do not research investment opportunities...and nearly one-in-six think it’s unimportant or unnecessary!

    In order to assist Albertans in protecting themselves from becoming a victim of investment fraud, the ASC launched a ‘Don’t Get Tricked’ campaign to educate the public about how they can use freely available ASC resources to protect themselves by thoroughly researching investment opportunities. As part of this campaign, the ASC took to the streets to remind Albertans that investment tricks don’t just happen at Halloween, hosting special ‘Trick or Treat’ events on October 28 (Edmonton) and on October 29 and 30 (Calgary). During these events, we provided Albertans with Halloween treats and information on what they can do to help protect themselves from being ‘tricked’ when investing, including checking registration and the red flags of investment fraud.

    Following is some positive feedback we received during these events from Albertans:

    • “This is really timely. I was just thinking of investing and the information will really help me.”
    • “I wish I knew this before I started investing.”
    • “This is a great public service. I‘m glad you’re out there as a resource.”

      While Investor Education month may be over for 2014, protecting your financial future continues year-round. The month of November marks the start of Financial Literacy Month across Canada. Be sure to visit the CheckFirst.ca and ASC websites to increase your knowledge about investing. It’ll help you protect yourself from ‘tricks’ in the future!

      Fraud Prevention Check First
      Fraud Prevention Check First
      Fraud Prevention Check First


      For more helpful information

      Investment Basics


      Don’t get tricked this Halloween. Check before you invest!

      Fraud Prevention Check First
       

      Halloween is approaching, and it’s time to face some scary facts when it comes to investing your money.

      Did you know that Albertans spend 3x more time researching their next vacation than they do their next investment? And that more people read through the inspection report on their property than review the terms of their investment? According to a recent survey of Albertans by the ASC, these and other worrisome facts were identified:

      • Just under one in ten Albertans believe that they have invested in what later turned out to be a fraudulent investment.
        • Three-in-ten believe they have been approached with a possible fraudulent investment.
        • Only one quarter of Albertans have ever checked into the background of a person selling or offering them investments.
          • Of those that didn’t, one-third thought they would be reputable because they were working for an investment company, one-in-five because they were recommended by someone they trust and one-third don’t know how or didn’t think of it.
          • Most Albertans do not research investment opportunities. Of those that do, two-thirds do not do research when considering new investment opportunities.
          • The most common way people are introduced to suspected fraudulent investments are via email spam (30%) and through a friend, neighbour, co-worker of family member (28%).

            It’s important to do enough research and due diligence to reduce the chance that the next investment you make is unsuitable, unsustainable or fraudulent. To help Alberta investors, the ASC provides a wealth of information on our websites and have launched a new campaign during October’s Investor Education Month. During this time we are:

            • Hosting a special ‘Trick or Treat’ event at City Centre Mall in Edmonton on October 28, 2014;
            • Hosting special ‘Trick or Treat’ events at the Core in Calgary on October 29 and 30, 2014;
            • Updating our website, Checkfirst.ca, that educates Albertans about their potential risk for investment fraud; and
            • Ramping up a public awareness campaign for the remainder of 2014 – watch/listen for information via newspaper, television, online, radio and even at your favourite team’s NHL game!

              Make sure to come down and visit us during October in Edmonton and Calgary. We’ll be handing out some ‘treats’ while providing advice on how to avoid being ‘tricked’ in your next investment.

              Before you invest, protect yourself, your money and your financial future by researching your potential investment with the help of the ASC and CheckFirst.ca.

              For more helpful information

              Red Flags of Investment Fraud


              Saving for your child’s education – it’s simple math that benefits you both!

              RESPs
               

              Raising a family today is hectic – full of multiple demands like schoolwork, soccer practice, and sleepovers. The financial costs of these activities only increase as children get older, and can make it tough to save for the future. Did you know that a majority of careers require some form of a post-secondary education[1]? This can add up to significant costs upon graduation should your child decide to enrol in college, university, trade school or other educational programs. As your child goes back to school this fall, it’s a good time to consider investing for their future education through a Registered Education Savings Plan (RESP), if you don’t already.

              What’s the Big Deal?

              Contributing to a RESP can make a big difference in terms of how much it will directly cost you and your child in the future for education. RESPS have many benefits specifically geared to students that other savings plans may not. These include:

              • Affiliated government grants. You can apply to the federal and provincial government for grant and tax incentive programs, which will match a portion of the money saved in a RESP.
              • Tax-deferred growth. You can contribute up to $50,000 per child to a RESP without any taxes being payable on the money earned until it is used. When the money is withdrawn, income earned is taxed at the student’s tax rate – which could be minimal as most students have little or no income.
              • Impact of compounding interest. The sooner you start contributing to a RESP, the more that can be saved! For example, you can earn an additional $20,000 by beginning contributions when your child is age 1 versus age 10:
               

              *Assumes $200 monthly contribution and a 6% rate of return compounded annually until the age of 18

              As you can see, it is a big deal – for you and your child. The benefits of a RESP can add up quickly. “Education is becoming increasingly expensive. Starting early to save for post-secondary education can go a long way in supporting your child’s lifelong success” said Alison Trollope, Director, Communications & Investor Education.

              As with any investment, there are certain things you should consider before contributing to a RESP. A handy RESP Checklist can be found on the ASC website that discusses fees, investment risks, and researching RESP providers. The Canada Revenue Agency also provides useful information on the program and their grants.

              Helping to provide for post-secondary education is one of the greatest gifts you can give your child – and an investment in their future.

              For more helpful information

              Canada Revenue Agency


              1 Job Openings 2011 – 2020, Canadian Occupational Projection System


              Back to school - learn the ‘Basics of Investing’

              Basics of Investing

              It’s never too early or late to learn about investing. Most people know they should pay more attention to their finances – where and how they invest for their future – but often find it overwhelming or don’t know where to start. Well, it’s back to school time! The temperature is getting cooler and school supply ads are everywhere – so now’s a good time to break out those pencils and learn the basics of investing!

              Investing doesn’t have to be intimidating

              Between GICs, TFSAs, the OTCB, hedging, buying short and diversification, investing can sometimes sound daunting. Rather than being put off by all the jargon, remember that the best investment plans start from taking into consideration your own needs and situation:

              • Risk tolerance – do you want a steady increase with low risk, or are you willing to risk some ups and downs for potentially higher returns?
              • Age – are you saving for retirement? Or are you just starting out?
              • Personal circumstances. Are you a student? Married? Divorced? A parent? Retired? Your personal status may affect your finances, and should be taken into account.
              • Future goals – do you want to purchase a house? Retire in Italy? Put your children through university?
              • As your life evolves, so should your financial plan. Taking the time to plan will help build a solid foundation for your financial future – so now is a good time to evaluate (or re-evaluate) your investment choices.

                How do I plan for my future?

                The ASC’s “Basics of Investing” course can help you get started. This course is ideal for beginners, discussing important investing topics such as the various types of investments , risk and return, how the market works and consulting with advisors. This course will provide you with a solid base from which to make well-informed investment decisions.

                Past participants have this to say:

                "A clear and concise course that delivers real-world investment information that is critical to any investor rookie. Great job!"

                The instructor gave an easy-to-understand overview of the investing world. I feel more informed and confident as I take my first steps into the investing world."

                Learn the basics of investing and you’ll be on your way to making more informed investment choices for a brighter future! With a little work, you’ll be sure to graduate at the top of your class!

                Helpful links

                Investing basics - Getting Started

                Investing Basics


                Babies and bank accounts: The ABCs of family budgeting

                Spring and summer are seasons of change – certainly one of the busiest times of year for high school and post-secondary graduations as well as weddings. Throw in the odd retirement party, and baby showers, and people of all ages are going through major life changes this time of year. This post concludes the “Summer Celebrations” blog series with a look at the financial considerations that come with welcoming a new addition to the family.

                Budgeting basics

                Starting or adding to a family

                Having children changes your life – and your financial life is no exception. You’ll need to start making your family budget a household priority, if you hadn’t already. If you have an existing budget, you’ll need to make adjustments to account for the newest member of your household.

                • Start saving for your child’s post-secondary education - it may seem far off now, but before long, they’ll be in school and potentially off to college or university. Consider looking into something like a Registered Education Savings Plan (RESP). RESPs are registered by the Government of Canada and are tax-free until the child enrols in further studies. Starting an RESP and letting your children know that you are contributing not only helps to provide for their future, but also models how having a plan can help a person reach their financial goals. Most banks, credit unions, mutual fund companies, investment dealers and scholarship plan dealers offer RESPs.
                • Besides RESPs there are some national and provincial government grant and education savings incentive programs that you will want to be aware of.
                • Give your children the opportunity to develop responsible money management at an early age. Earning an allowance and encouraging your child to track spending, saving up for something special to buy, and putting money away are great ways to teach your child how to value money.
                • Consider the calendar - important dates like birthdays and holidays may require extra expenditures to be accounted for in your budget. Likewise, once your child is old enough to participate in seasonal activities, these should be considered as well, such as the cost of hockey equipment or summer camps.

                If you are on the parenthood path, it’s never too early to start planning for your family’s financial future.

                Check out the previous instalments in our ‘Summer Celebrations’ blog series below!

                Have a great summer everyone!

                Helpful links

                RESP Checklist

                Ideas for how to be a money mentor to kids (for both parents and educators)

                Financial literacy resources for parents from the Canadian Bankers Association


                Marriage & money: 4 key financial tips for newlyweds (and 1 for their wedding guests)

                Spring and summer are seasons of change – certainly one of the busiest times of year for high school and post-secondary graduations as well as weddings. Throw in the arrival of new bundles of joy and the odd retirement party and people of all ages are going through major life changes this time of year. This edition in our “Summer Celebrations” blog series focuses on weddings, one of the most popular events on the summer social calendar.

                Marriage and Money

                For love or money

                First comes love, then comes marriage, then comes... joint chequing accounts? Maybe, or maybe not. The choices you and your new spouse make about money are likely going to be as unique as your first dance song or honeymoon destination – planning your future together is integral to your new partnership. It’s important to make thoughtful decisions about how your marriage will work financially in order to pave the way for a long and happy life together.

                Merging finances

                When you’re combining your financial future with a spouse be sure to keep the lines of communication open. Sadly, one of the leading cause of divorce and separation is disagreement over money matters.

                • Have honest discussions about money. There is a large selection of easy-to-read books on newlywed finances in your bookstore or local library; take the time to read one or more from well-respected, credible authors, and discuss the topics in detail with your significant other. Nothing worth doing was ever easy!
                • Set mutual financial goals for one, five and even ten years, and make agreements about how you plan to spend and save to achieve these goals.
                • Maximize your retirement savings. Whether you’re in your 20s or 40s, it’s tempting to put this on hold while you make other joint purchases like a house or car. Keep in mind that the earlier you begin saving wisely, the better chance that you’ll enjoy a comfortable retirement.
                • Think about talking to a registered financial adviser to learn more about how you and your partner can maximise your financial situation. For example, there may be tax incentives that you can take advantage of, or considerations to be aware of when adding your spouse to the title of a property you already own.
                • If you’re not the one getting married but invited as a wedding guest, consider giving the joyous couple a gift that is both highly valuable and lasts a lifetime; the gift of knowledge. ASC’s “Basics of Investing” course, offered at Mount Royal University in Calgary and Metro Continuing Education in Edmonton, offers a reduced rate for couples’ registration.
                • Our next post will conclude the “Summer Celebrations” blog series with a look at the financial considerations that come with starting (or adding to) a family.

                  Have a great summer everyone!

                  Helpful links

                  Budgeting & planning tools

                  Find a financial adviser

                  Check registration and history


                  Foreign currency trading/Forex

                  This post in our “Summer Celebrations” blog series was inspired by national summer holidays - Canada Day and the 4th of July - and discusses foreign currency trading.

                  Forex Foreign Currency Trading

                  The calls and emails we receive here at the Alberta Securities Commission via our Public Inquiries Office are a great barometer of what’s on investors’ minds at any given time. Currently, we are receiving an increased number of inquiries about trading in the currency markets, also known as foreign exchange, or forex.

                  Recently, forex firms in the United Kingdom have begun removing non-residents (including Albertans) from their trading accounts. As a result, callers are contacting us to ask how to trade forex in Alberta. According to Alberta’s securities laws, forex issuers and dealers – whether based in Canada or another country – cannot distribute these high-risk investments to Alberta investors without complying with the prospectus and registration requirements or exemptions from those requirements.

                  As with any investment, it is important to do your research. Read more about scams related to forex (click on the “Foreign currency trading” drop-down). Also, remember we are here as a resource before you make any investment decision: call us toll-free at 1-877-355-4488 or email inquiries@asc.ca.

                  Check back for the next instalment in our summer celebrations series.

                  Have a great summer everyone!


                  A financial guide for grads

                  Spring and summer are seasons of change – certainly one of the busiest times of year for high school and post-secondary graduations as well as weddings. Throw in the arrival of new bundles of joy and the odd retirement party and people of all ages are going through major life changes this time of year. The first post in our “Summer Celebrations” blog series talked about retirement - this instalment, graduations.

                  Financial Guide for Grads

                  The future is now! Financial tips for new graduates

                  Whether it’s from high school or post-secondary, graduation is a big deal. Starting the next chapter in your life can be both exciting and scary. It could mean moving, starting a new job, pursuing further education or taking some time off to travel. If you’re lucky, you may even receive some financial gifts from loved ones to help you on your way.

                  What should you do with the cheque from Grandma?

                  If you are the recipient of a nice financial gift from family or friends, keep this in mind: Manage your money wisely and you can enjoy a secure financial future. Manage your money foolishly and you can say goodbye to financial independence.

                  Here are some tips to help you remain financially on track:

                  • It’s okay to treat yourself with a set amount of money when you receive a gift like this. There’s nothing wrong with celebrating your academic accomplishment. Consider whether your gift will be more of a splurge, like a vacation, or something more practical, such as a new working wardrobe to start off your career on the right foot. Whatever you choose, avoid making dramatic alterations to your lifestyle that involve spending money that you may want to invest or tuck away for a rainy day.
                  • Keep a realistic state of mind so that you remain responsible with your money. Take time to soak in the reality of having more money, and avoid making plans or decisions hastily. More money in your pocket does not mean you don’t have to save, invest, or follow a budget anymore! Here are some easy money-saving tips.
                  • Having a game plan for your money is the foundation for your financial future. When developing your plan, consider all the factors that relate to your personal and financial circumstances. Talk to someone you trust who has solid business knowledge or experience with finances - they can help get you started.
                  • Beware of the scammer. Unfortunately there are people just waiting to get their hands on your money. Whether it be for an investment or a used car, before you make any big financial decisions, do some research and a background check so you know who you’re handing your money to.

                  Starting to invest

                  As a young graduate, time is on your side. Thanks to something called compound interest, the earlier you start investing, the more your money can grow. Regularly invest a small amount of money early in your life and you can end up with more money than someone who starts investing later on.

                  Want to jump in but don’t know how? Take these initial steps so that you can be a more savvy investor:

                  • Read up: There are lots of books, magazines and blogs out there with all sorts of interesting advice on investing. Remember to balance this with some good information from neutral and unbiased sources such as your local securities regulator. The ASC has plenty of helpful links and reading materials.
                  • Take a course: Though going back to school may be the last thing you feel like doing after graduation, the ASC offer both in-classroom and online courses – there’s something for everyone. Check out what’s available online year-round and coming up in the fall.
                  • Watch a video: If quick snippets of information are more your style, check out the ASC’s YouTube clips to learn more, including how to better protect your money from scams.

                  Whatever you decide to do with your money, enjoy it and this time in your life.

                  Check back next week for the next instalment in our summer celebrations.

                  Have a great summer everyone!


                  Pot.com: How to prevent your money from going up in smoke

                  Facebook Twitter Pot.com prevent your money from going up in smoke

                  It seems that everywhere you turn the news is covering recent changes to legislation regarding the use of marijuana. In some U.S. jurisdictions, these changes involve either allowing for the medical or recreational use of marijuana, or the decriminalizing of possession in small amounts. As a result, many companies have stated their intentions to become suppliers of marijuana, with some retail investors looking to “get in on the ground floor.”

                  On Friday, April 4, 2014 the first marijuana producer began trading on the TSX Venture. There are also a number of these companies trading on different Over-the-Counter (OTC) markets in the United States (including the OTC Bulletin Board and the OTC Markets Group’s OTCQB and OTC Pinks) purporting to becoming major players in this new sector.

                  Less than a week after that April 4 trading start, an SEC crackdown caused some of the most popular stocks in the sector to crash.

                  So what do you need to know?

                  • Similar to the dot-com boom back in the late 1990s and early part of the last decade, there is a great deal of hype about the cannabis sector; share prices will tend to fluctuate based on speculation rather than on real market value.
                  • The ASC does not recognize any OTC markets as exchanges. Stock exchanges such as the Toronto Stock Exchange, Nasdaq and the New York Stock Exchange have specific quantitative and qualitative listing and maintenance standards that are monitored and enforced. OTC markets are simply stock quotation services – there are no defined standards for companies quoted on these markets. This increases your risk of potentially losing your money.
                  • OTC companies with a connection to Alberta may be required to file with the ASC and other Canadian regulators either audited or unaudited financial reports depending on their OTC tier; failure to comply will result in a company being cease traded, leaving investors unable to sell their shares.

                  How can you help protect your money and avoid being scammed?

                  1. Exercise extreme caution when considering an investment in any highly speculative market like marijuana stocks, as the potential for misrepresentation is at an elevated level. Relying solely upon information found on message boards, in stock promotion newsletters or provided by the company can result in significant losses.
                  2. If, after thorough research, you still want to invest in this high-risk sector, familiarize yourself with the regulations, licensing bodies, etc. that govern the growing, processing and distribution of marijuana either for medical or recreational use where it is allowed.
                  3. As with any financial transaction, be well informed so you can decipher whether the information you’re being given is true, and don’t take significant risks with money that you cannot afford to lose.

                  The bottom line is that it’s your money, but you’ve worked hard for it. Take steps to think critically about the risks you are taking when investing.

                  The Canadian Securities Administrators issued an alert on June 16 about investing in marijuana stocks. For more information, check out an investor alert issued by the Financial Industry Regulatory Authority in the United States (FINRA), as well as an investor alert on marijuana-related investments by the U.S. Securities and Exchange Commission.

                  Next week we’ll return to our regularly scheduled blog series “Summer Celebrations” with a post on advice for new grads.


                  5 ways to avoid being scammed out of your retirement

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                  From retirement parties to weddings, baby showers and more, summer is a time of celebration. This season, we’ll be blogging about the impact that many of these significant life events can have on your finances. We’re kicking off our Summer Celebrations blog series with a post on protecting your retirement in honour of Seniors’ Week, June 2 – 6, 2014.

                  Fraud Prevention, Retirement Scams

                  You’ve worked hard and you’re looking forward to a fulfilling retirement. All of that can be jeopardized if you fall victim to an investment scam - a misstep that’s easy to make in a world where you’re bombarded by companies encouraging you to invest with them.

                  Here’s the reality: there’s a chance some of these salespeople are trying to talk you out of your cash. Fraudsters are always looking for new ways to scam people, particularly those who have money for the taking - those with retirement savings.

                  So how do you decide where to invest your retirement money? Keep the following five considerations in mind before committing to any investment opportunity:

                  1. Be suspicious of any strangers who seem especially friendly but are also trying to sell you something. Scam artists will use your sense of trust against you, often pretending to have interest in your family and may even infiltrate your place of worship or community organization.
                  2. Don’t make any decisions on the spot; take time to think about any investing decision.
                  3. Ask yourself: “Why is this person trying to sell me this investment? What’s in it for them?”
                  4. Think about whether you are in a position to risk your savings. If something goes wrong, what can you afford to lose?
                  5. Ask lots of questions and ask the right people. Get a second opinion from friends or family members not involved in the deal. You can also talk to someone with business knowledge such as a financial adviser or planner, or an accountant.

                  Many of us have lived through times when we took a person’s word and deals were made with a handshake. In fact, it can seem rude or inappropriate to question someone, especially if they seem friendly or pleasant.

                  “When it comes to investing, you can’t be too careful,” says Lorinda Brinton, ASC senior advisor for investor education. “If you’re not sure about an investment, don’t hand over your money. It’s okay to say no -- you could potentially avoid a financial loss down the road.”

                  Do you want help taking the first steps to protect yourself and your retirement? Contact us! We can tell you if the individual or company offering you the investment is registered and if they have any history of enforcement action.

                  Do more to protect yourself from investment fraud:

                  Check back later this month, when we’ll share some tips for grads on how to handle any monetary gifts.


                  Is there such a thing as a free lunch?

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                  We’ve all heard the phrase “there’s no such thing as a free lunch,” meaning that it’s impossible to get something for nothing. But what does that mean when it comes to investing?

                  It means that securing a bright financial future isn’t easy, and that it’s important to do enough research and due diligence to reduce the chance that the next investment you make is fraudulent. One in three Albertans report being approached with a possible fraudulent investment. Do you know what to do if it happens to you?

                  In conjunction with Fraud Prevention Month in March, the Alberta Securities Commission (ASC) has developed a campaign to educate the public with three key steps anyone can take to decrease their chances of becoming a victim of investment fraud: Check.  Protect.  Invest.

                  • Check registration of the firm or individual offering the investment;
                  • Protect your hard-earned money by asking the right questions and understanding the potential risks involved;
                  • Only after these steps should you take the third step – to invest.

                  Here’s how we’ve been getting the word out:

                  • One new website, Checkfirst.ca that educates Albertans about their potential risk for investment fraud.
                  • Three quiz questions on that site to help Albertans assess if they are at risk.
                  • Two ASC #freelunch events in partnership with local food trucks during March.
                  • Eight hockey games in Calgary and Edmonton, where fans can see our message lit up on the scoreboards.
                  • 15 seconds that Cineplex viewers (in Fort McMurray, Medicine Hat, Lethbridge, Red Deer) and elevator riders In Calgary and Edmonton will see the Check.Protect.Invest message.
                  • 16 street patrollers helping spread the word to downtown Calgarians and Edmontonians.
                  • 20 light-up posters catching the eye of Edmonton pedway users.
                  • 29 days that visitors to the Google network and BNN.ca websites can see ASC on-line ads.
                  • 99 communities throughout Alberta that will hear the ASC’s radio ad.
                  • 489 tables in the downtown Calgary mall informing lunch-goers to Check.Protect.Invest.
                  • 1,000 sandwiches served up to Albertans.

                  What does this all amount to? The ASC’s latest public awareness campaign - in support of the initiative, the ASC held two #freelunch events on March 12 (Calgary) and 19 (Edmonton) where we offered Albertans a “free” sandwich. But no lunch is free – including ours. In return, we are asking Albertans to take a few moments of their day to visit the Checkfirst.ca website and learn what they can do to help protect their financial future by avoiding investment fraud.

                  While Fraud Prevention Month runs during March, the ASC is available year-round to educate Albertans about making informed investment choices at www.albertasecurities.com.

                  Scenes from our Calgary and Edmonton #freelunch events

                  Fraud Prevention Check First

                  Fraud Prevention Check First

                  Fraud Prevention Check First

                  Fraud Prevention Check First


                  Binary Options – Caution for investors in Alberta

                  Recently, the ASC has received calls from investors in Alberta asking for information about what’s known as the binary options market.

                  Binary options are essentially “bets” as to whether the value of an asset will increase or decrease in a fixed (and often very short) period of time. Investors face only a few possible outcomes when the option matures: they receive a pre-determined cash payout (often called the “premium”) if the value of the asset increased over the relevant period; or they may only receive a small percentage of the principal back or even lose their entire investment if the value decreased. This is why binary options are sometimes referred to as “all or nothing” options.

                  Alberta residents should exercise a high level of caution when considering a purchase of binary options. These securities are primarily offered by offshore firms, and are therefore not registered with or regulated by the ASC. If you buy them, you will not have the benefit of the protection of Alberta securities laws, such as disclosure requirements. Purchasing these options may put any money “invested” at significant risk.

                  Binary options are typically offered through online ads, emails and social media, and also over the telephone. Persons or companies offering the sale of such options to Albertans are required to be registered with the ASC, so be sure to use the National Registration Search to check if that person or company is registered.

                  Facts to be aware of:

                  • Binary options are typically traded within extremely small time frames, which increases risk significantly. Even very knowledgeable investors may find it difficult to predict whether the stock price of a public company will go up or down in the next 10 minutes; in almost every case, it’s just a guess.
                  • Binary options trade with such speed that wins and losses happen very quickly.
                  • Promises on certain binary option websites that “even if you lose the trade, you don’t lose money” are false –the disclaimers written in small print on the same websites clearly state that you can lose all or a portion of your money.
                  • Binary options are often traded in the currency markets, also known as foreign exchange or “forex.” Alberta residents who do not meet accredited investor requirements cannot trade forex.
                  • Many of the trading platforms operate from servers in the U.S. and overseas (e.g. Cyprus), which means you are sending your funds outside of Canada, often through a wire transfer. This makes it difficult - if not impossible - for local regulators to assist you if a dispute arises.

                  Before you trade in binary options, consider what you can and cannot afford to lose. Please contact the ASC Public Information Office if you have questions: 1-877-355-4488 or inquiries@asc.ca.


                  Three easy investor resolutions for 2014

                  Wondering what resolutions you should make for 2014? Check out our list of three easy commitments that investors, and those thinking of investing, will be able to keep:

                  1. I will learn more about investing. Making financial decisions can seem overwhelming, but we all know it’s something we need to pay attention to, especially when planning for retirement. Break down the mystery - browse through our free ASC brochures or take The Basics of Investing, our in-classroom and online course offered at Mount Royal University (Calgary) and Metro Continuing Education (Edmonton).
                  2. I will consider the help of a registered financial adviser. The qualified recommendations of someone registered with the ASC can go a long way in helping you manage your investments. Watch our video Who’s Taking Care of Your Money? and confirm registration of anyone offering you an investment.
                  3. I will take time to do my own research when considering investment opportunities. It’s important to avoid making quick decisions when it comes to your investments. Plan ahead and don’t put yourself in situations where you feel put on the spot to make an immediate decision. Read about investment seminars and cold calls and make use of ASC’s enforcement information so you know what you might be getting into.

                  The start of each year is an opportune time to take stock (pun intended) of where we are with our investments and where we would like to be. Research shows that if you tell people that you are making a commitment, you are more likely to stick to it. So share these resolutions with friends and family by sending them a link to this blog, and challenge them to join you in having a great start to the financial year.


                  November is Financial Literacy Month. Make sure you’re an informed investor.

                  With fall being busy with school activities, Halloween and Christmas plans, RRSP season seems but a distant dream at the moment. But the new year will be here before you know it. Why not beat the rush?

                  November is Financial Literacy Month and there’s no better time to become familiar with the free online investor education tools that can help you become a more informed investor. One of the ways that many people end up in investments that they aren’t comfortable with is because they rush through the selection and decision-making process.

                  Not sure how to get started? Here are five easy steps to improving your financial literacy:

                  1. Read up on what you should know when choosing and working with a financial adviser. You can also use this handy workbook to keep track of your research.
                  2. Check to see if the individual or company offering an investment opportunity is registered. Use the Canadian Securities Administrators National Registration Search tool. If you’re unsure why it’s important that your adviser be registered, or what it really means, check out the Understanding Registration resource.
                  3. Check disciplinary history to see if any enforcement decisions or cease trade orders have been issued against individuals or firms. It can also be helpful to do a general online search and look through ASC news releases for information. You may hear about unhappy victims or court cases that you may want to further investigate.
                  4. Know what you’re investing in. Familiarize yourself with some of the common types of investments by browsing through our free investor brochures. You may also want to look up any terms you don’t know in our glossary.
                  5. If you don’t understand what an investment opportunity is all about, stop and take time to learn more – you don’t have to sign on the spot. Consult with an independent third party that is not involved in the deal and who has some business knowledge, such as an accountant or lawyer.

                  You owe it to yourself and your family to be informed when investing your money. Take the opportunity during Financial Literacy Month to do some research. A little bit of extra time now could potentially save you from a lot of hassle in the future.


                  Welcome to the new www.albertasecurities.com

                  When clean looks marry usability

                  You shouldn’t judge a book by its cover, but we’ve worked hard on what you see when you visit the Alberta Securities Commission’s website. It was designed with the user experience in mind, recognizing the different needs of all of our visitors. That’s why when you first enter our site we ask if you are an investor or member of the public, or if you’re an industry professional. At any time you can click on the tabs in the top right corner to change your selection - this is just one of the ways we are making our information easier for you to find.

                  Not just a pretty face

                  The simplified looks aren’t the only thing that has changed about our website. The web pages have been reviewed, reorganized and refined in a way that helps you get right to the knowledge you need. Whether you are an investor who’s just starting out or an issuer that’s looking for continuous disclosure filing deadlines the information you require is at your fingertips.

                  A sneak peek of what's inside

                  Our webpage content is designed to help you find what you need as you make your investing decision. Some improvements to the site include:

                  • Easy to read drop-down menus from the tabs on the top of the page. This helps you see at a glance where you can find what information.
                  • Easier access to News & Publications as well as Proceedings, Decisions & Orders information within For Investors as these areas contain important documents that can help you with your research when considering an investment opportunity.
                  • Up to date information on the various designations and titles that you may see when dealing with someone in the investing industry, with direct links to the associations granting the designations.

                  What's next

                  We think our new site is pretty great, but we aren’t stopping here. A website grows with an organization and its users’ needs. We’ll continue to make improvements, but in the meantime, please send your questions and thoughts to webmaster@asc.ca with the subject line: Website 2013. We’re happy to help you get the best experience possible from the new www.albertasecurities.com. Enjoy!


                  Facebook “friends” don’t count

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                  “A friend is someone who knows where the bathroom is at your house without having to ask.” While this may be a humorous way of defining a friend, most of us involved in social media have many “friends” who would not meet this definition.

                  While the internet is a fantastic tool for many things, including keeping in touch with those near and dear to us, social media can have risky outcomes for investing. It’s entirely possible to perceive a close relationship with someone you don’t actually know beyond the screen. Unfortunately, this can be dangerous.

                  Affinity fraud

                  If you follow Paul on Twitter, and are constantly seeing him post about his new house, or expensive vacations, it’s normal to wonder how he can afford it. If you comment saying how lucky he is on the Instagram photos of his new car, and Paul replies saying that you could be, too, if only you got in on the brilliant investment that’s making him all that extra money, you might be tempted to do so. After all, you know Paul, right? You know his investment is paying off - you’ve seen the pictures of his car. Not so fast! Scam artists love to prey on people’s trust in those they know, or feel they do. This is known as affinity fraud, and social media can make us feel like we ‘know’ a person, or group of people, much better than we actually do.

                  Affinity fraud is defined as: A type of scam that usually occurs in a group setting (ethnic groups, clubs, associations, religious groups, etc.). Scammers will gain trust by joining groups where they can share common interests; it is often easier to trust someone who is like you or has similar interests to you. Once trust is gained, it is easier to execute a scam.

                  Accredited investor and friends and family exemptions

                  Most of us have a friend that uses social media to promote their business. While Cathy from your coffee shop who sells cosmetics is probably harmless, what about people who are trying to get you to invest in their business, not just sell you product?

                  Alberta securities laws specify what information must be available to potential investors in any venture. This is so that each potential investor will have access to the same information as others and enough information to determine whether the investment is suitable for that person. An exception is made for one group of people, known as accredited investors.

                  An accredited investor is defined as: A government, financial institution, large company, or individual with a required level of income or assets, permitted to invest in certain types of securities sold without a prospectus.

                  In terms of income or assets, generally, the less you have, the less you can afford to risk (and potentially lose).

                  Under securities laws, there is also an exemption from the prospectus requirement to allow investing for those who are not “Accredited Investors”– the so-called “Family, friends and business associates” exemption. This exemption was made for specific relatives and close friends of the business owner/operator who are presumed to know the person they are investing with and their business skills/plans well enough to make an informed decision. Examples of this would be someone who is not accredited, but wants to help their brother open a restaurant, or their best friend expand her hair salon. Those who want to invest are required to sign a form stating that they are either a) accredited or b) a close friend or one of the specified family members of the person offering the investment.

                  If you are one of Harry’s herd of Facebook friends who are asked to invest in his start-up, think about how well you know your friend Harry in real life (IRL, as they say online), before signing that form that says you are his friend or family member. Doing so means that you have agreed to invest without the benefit of all the information that Alberta securities laws says you are otherwise supposed to get. It’s a big decision, and the wrong one can mean you lose all of your investment, so think about whether or not you feel you have enough information, including about your “friend.”


                  Avoid financial disasters in times of natural disaster

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                  Many are now aware of or have been affected by the recent flooding in southern Alberta. We have also witnessed the generosity and resilience of Albertans during this time. While this spirit of perseverance and giving to others is heart-warming, and essential to those trying to rebuild their lives, unfortunately these types of disasters also attract those looking to profit from the situation.

                  If you, friends or family members are in crisis, keep the following in mind:

                  • During a crisis, people are especially vulnerable to, and more likely to make, rushed or poor decisions. When it comes to finances, that can lead to a higher risk of fraud. This vulnerability can be caused by lost income from a temporarily or permanently closed business, personal property damage, trauma from disaster, or simply physical, mental and/or emotional fatigue in our families and those around us.
                  • One of the first things you may need to do is to try to gather all the information about your finances, assets and investments into one place. If you’ve lost documentation on account numbers and passwords that may have been written in hard copy or stored on a computer that has been damaged, find someone that you know can be trusted that can help you gather this information (e.g. you can contact your financial institutions or investment adviser for some of this information).
                  • You may find yourself needing to recoup from a large financial loss (such as losing part or all of a home or business). Don’t rush into any emotional decisions about your or your family’s financial future. While you may feel the pressure to act quickly, take the time to properly look into new opportunities to avoid getting involved in another potentially devastating financial situation.
                  • If you need to make a big decision right away, consider whether there is someone you know who is trustworthy that can help you weigh pros and cons if you need advice, or if you are unable to make decisions for yourself.

                  Some tips for those wanting to donate or help others:

                  • Wanting to donate time, materials or money to help others? Great! To avoid being taken advantage of, try to first do some quick research on the individuals, charities or businesses that may solicit you for financial or material contributions.
                  • Many organizations and businesses will promise to donate to disaster relief if you purchase a product or service from them. Depending on the business, this may or may not be true. Even if it is, don’t let the promise of a charitable donation influence you into decisions that aren’t suitable for your needs.
                  • While it is common to be approached with a disaster relief scam via the phone, you should also be wary of online requests for help. These can come via fake websites, spam emails, or social media. These are quick and easy channels for someone to anonymously collect personal and financial information from you that can be misused.
                  • If you are asked to make investments into rebuilding infrastructure or housing, do a background check to see if the requests are coming from a legitimate source. If it sounds like an investment or a security, contact our inquiries office to see if the individual or company is required to be registered with us: toll free 1-877-355-4488 or inquiries@asc.ca.
                  • If you are being promised a tax receipt for your donation, or if you are volunteering for an organization that is promising tax receipts, you’ll want to be clear on what donations are actually eligible. Contact Canada Revenue Agency for more information on charitable giving. Do an online search and look through news stories, social media sites or online forums that may have information about an individual or supposed charitable organization. These sources can often tell you about unhappy victims, court cases and even rumours that you may want to further investigate.

                  Even more so in difficult times, it’s important to keep your wits about you. Let’s take care of each other and ourselves in order to rebuild and avoid further financial loss.


                  Buying stocks listed on an ’unconventional’ exchange? Better check first.

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                  It’s important to understand the different types of exchanges available to investors, because there are many others beyond the more familiar TSX and NYSE. Each exchange is unique and presents varying levels of risk. Don’t be fooled into thinking that just because a company is listed on an exchange that the investments being offered, or even the company itself, are risk-free.

                  There are some exchanges that the ASC does not recognize - perhaps the exchange does not meet our requirements to be recognized (as outlined in National Instrument 23-101), or perhaps those who manage the exchange may have chosen not to apply for recognition. One example of an unrecognized exchange is the OTCBB (Over-The-Counter Bulletin Board) which operates out of the United States. For more information on this, you can read up on the list of exchanges that are recognized by the ASC.

                  Regardless of whether your investments are on an exchange or not, be sure to follow these tips to better protect your money:

                  • Know that it is illegal for a person or company to suggest that an unlisted security they are selling will be listed on an exchange or even that an application has or will be made to list the security on an exchange without prior approvals (refer to Section 92 (3) of the Act).
                  • Be aware that not all investments listed on an exchange have the same risk profile. All investments come with some level of risk. Check the background of the company and individuals offering the securities before you invest.
                  • Read the legal notices and disclaimers on any exchange where your security is listed. You may not be comfortable with the terms and conditions.
                  • Know your risk tolerance level. If an investment seems too risky for you, think twice. It is always a good idea to get a second opinion on any investment opportunity. Consult with someone with business knowledge such as a lawyer, accountant or financial advisor who is not involved in the deal.

                  The next time you are presented with an investment where the stock is listed on an obscure or non-mainstream exchange, be a wise investor and take the time to check first.


                  Caution! Crowdfunding

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                  If you are someone that spends a fair amount of time online and on social media, you’ve likely heard the term crowdfunding. You might be wondering: What is it? How is this different from other types of investing? Is it legal in Canada?

                  Though the specifics in each case can be different, here’s a quick breakdown:

                  Crowdfunding is essentially a process whereby a person or company asks for small amounts of money from a large number of people (often via social media) for goals such as providing funds for an event, an organization, or even disaster relief. The individuals involved (both those being asked for money, as well as those doing the asking) sometimes share a common interest, whether it be a charitable cause, cultural or artistic project, or event.

                  Sometimes people want to use crowdfunding to raise money for a business, for example, a start-up company or an existing business that is struggling. In some cases, people are merely asked to donate money . The proverbial hat is passed around via social media.

                  In some cases, “securities” are being issued in exchange for investing in the business. These kinds of transactions must comply with securities laws. Loans, promissory notes, shares, and units are just a few of the examples of things that are considered securities. But it doesn’t really matter what creative name is given to it, if you give someone money and expect to make a profit from their efforts or those of a third party, it’s probably a security and they’ll need to comply with securities laws.

                  In addition, anyone in the business of helping to find investors for persons or companies needing funding or advising people about investing may also be subject to securities laws and may need to be registered, for example, as investment dealer, adviser or an exempt market dealer – unless they are relying on an exemption from the registration requirement.

                  The bottom line is, if people are being asked to make a loan or other investment, securities laws need to be addressed. If those asking for the money can’t explain how they are complying with securities laws that should probably set off some warning bells for you.

                  Remember that even if a crowdfunding deal is structured to comply with securities laws, it’s still always important to determine what your goals and risk tolerance levels are before investing. Participants who are considering providing money via crowdfunding should be aware that there are risks involved, as there are with any investment. Anyone telling you differently or downplaying the risks to convince you should be treated with caution.

                  So do your research, look into the backgrounds of those offering such opportunities, and never provide more capital than you can afford to lose.

                  Crowdfunding is a complex topic, so if you need more detailed information, or have questions about a specific investment you are considering and the application of securities laws, please contact me via the ASC’s Public Inquiries Office at 1-877-355-4488 or inquiries@asc.ca.


                  Beware of "spoofing"scheme

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                  Recently our enforcement team came across an investment scheme where the scam artist used a legitimate company as bait to try and separate investors from their money. The scheme involved “spoofing” or masquerading as a real company by lifting information from a legitimate company’s website on to a fictitious website for the purposes of raising funds. It’s like a case of stolen identity – the ‘fraudulent’ company even copied the biographies of some of the legitimate company’s directors.

                  How can you protect yourself from a spoofing scheme? When you visit a website to seek more information about an investment opportunity, scrutinize the information that is presented, and investigate further before you invest.

                  Here’s what to watch for:

                  • Unsolicited investment opportunities made over the phone or via email.
                  • Websites that ask for your contact information but do not provide you with any information about who is overseeing the company or how to contact them.
                  • Misleading photos and images aimed to appeal to your dreams and emotions that don’t truly represent the investment opportunity.
                  • Ads and websites that look professional, but a closer review reveals spelling and grammar mistakes.
                  • Buzz words or reference to market trends - these can lure you in as you feel you are part of something "big" (e.g. green energy).
                  • Language or complex diagrams that baffle you with technology jargon, but do not contain much quality information about what the investment actually entails.

                  What you can do:

                  • If the website outlines the backgrounds of those involved in the investment opportunity, search their names on the internet to find out more about the individuals.
                  • Contact the Alberta Securities Commission (ASC) to see if the company or individuals offering the opportunity are registered or if there are any current or prior enforcement proceedings, orders or decisions against them. You can search on our website, email inquiries@asc.ca or call toll-free 1-877-355-4488.
                  • Check the credibility of the information provided by the company. One way to do so is to compare it against the information the company filed with securities regulators. For public companies, these documents are available on www.sedar.com.
                  • Get independent expert advice from someone not involved in the business deal.
                  • Walk away if pressured to make a decision on the investment right away.

                  If you or someone you know has come across this type of investment scheme, please contact ASC Public Inquiries at 403-355-4151, toll free 1-877-355-4488 or email inquiries@asc.ca.


                  Ask your question

                  If you have a question you would like to see answered on this page, email them to questions@asc.ca. We may not use every question we receive but will concentrate on areas from which we receive the most inquiries.

                  If you have a question related directly to your own situation, please contact ASC inquiries using our toll free number (1-877-355-4488) or email inquiries@asc.ca. If you have a complaint, email complaints@asc.ca or call 403-355-3888.

                  More reading

                  We encourage you to make use of our ASC resources to reduce your vulnerability to fraud, and to help you to become a better informed investor with some knowledge of how the markets work.

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