Recently, we’ve received some questions about the various titles that finance professionals use, what they mean under securities laws, and what you can expect from individuals using them. Not all investments must be sold by an individual or firm registered under the Securities Act (Alberta) - for example, segregated funds or GICs. However, generally anyone, regardless of what title they use, who is in the business of selling an investment that is a security (for example a mutual fund, share, stock, bond) must be registered under the Securities Act (Alberta).
Persons who are registered under the Securities Act (Alberta) as Dealing Representatives (for example) are generally licensed to sell you products sold by the investment firm they work for, and are obligated to provide you with advice on the suitability of those products for your circumstances. In that sense, it’s not unlike purchasing a car from a dealership. If you walk into a Volvo dealership, and explain your needs (four-door, certain horsepower) the person working there will suggest the most suitable Volvo for your needs. While they might have a small selection of other makes and models in their inventory, they are not required to know about, or recommend, any make or model that is not in their inventory that might meet your needs as well, or better. This is true no matter what job title they use, be that “personal banking associate,” “investment representative,” “investment specialist” or any other title.
Fortunately, it’s easy to check whether the person offering you an investment is registered, regardless of what title they use. Simply enter their name (you can also search by firm) into the National Registration Search. The Canadian Securities Administrators (CSA) also offers a guide to the different types of registrations, and the ASC offers information on specific designations finance and securities industry professionals may have, and what they mean.
Once you have verified that they are in fact registered, and what type of registration it is, you should ask whatever questions you need depending on your specific situation. Just as one customer at a car dealership might want to speak to someone who has expertise in four-wheel drive vehicles, you might be looking for a specific product (mutual fund, scholarship plan, etc.) and want to make sure that person sells that product.
Those selling investments must complete a ‘Know Your Client’ (KYC) form so they can assess your current financial situation, your investment objectives and risk tolerance, and likewise, anyone considering investing should make sure they know the person they are purchasing investment products from and understand what that person is registered to sell.
This blog is for general information purposes only and does not constitute legal or other professional advice. You should obtain independent professional or independent legal advice prior to acting on information in this blog or if you have questions about your particular circumstances.
Canadian Securities Administrators information on how to work with a financial adviser
Questions to ask when choosing a financial adviser