What type of broker do I need?
Choose a broker based on the level of service you want and how much you want to pay in fees. Your choices include:
- Full-service stockbrokers. These advisers work for a brokerage firm. In exchange for the services they provide, you will pay fees and commissions. They are registered as investment dealers.
- Discount brokers. These advisers work for a discount brokerage firm. You'll pay lower fees and commissions because you don't get help choosing investments. Discount brokers are registered as investment dealers.
- Investment counsellors. These advisers, and the companies they work for, focus on clients with a higher overall net worth. Clients usually have at least $250,000 to invest. Investment counsellors will manage your investment portfolio for you. They are registered as advisers.
Tip: You may hear about investing through an offshore broker. The idea is that you can make more money and avoid taxes by taking your Canadian dollars to an offshore tax haven (usually in warmer climates). It's a good idea to use caution, though. Canada?s securities and banking laws are there to protect you by offering recourse through the courts if you feel you have been harmed in your investing. When you take your money to another country, you may lose that protection. Learn more now about the dangers of investing offshore.
Are all advisers equal?
Different types of advisers offer different levels of service. The more help and advice you want, the more you can expect to pay.
Tip: Some advisers may have a bias toward certain investments. For example, they may prefer to sell you:
- Investments that they are registered to sell and/or know a lot about. They may not tell you about other options.
- Investments that they have had a good experience with in the past. They may not introduce you to new choices.
- Investments that bring them the biggest commission or fees when you buy or sell. They may not give you other options that can offer you a good return with lower costs.
Make sure you find out what range of investments they will offer you and how. Learn more now.
Remember: Advisers who sell stocks and bonds must be registered
Check their registration before you give any money to any adviser.
To check the reputation of a company selling mutual funds, stocks, and bonds, you can contact your provincial securities regulator or the . If you are buying an insurance-type investment, you can check with the Consumer Assistance Centre at 1-800-268-8099.
To learn more about investment dealer and adviser registration, read .
To check whether an adviser is registered, see the at the Ontario Securities Commission's (OSC) website.
To learn more about securities regulation in Ontario, visit the website.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.