Tamera Van Brunt
Think you know all about working with investment professionals? Separating fact from myth can save you a load of stress and help you make better-informed decisions as to which investments are suitable for you, says Tamera Van Brunt, chair of the investor education committee of Canadian Securities Administrators (CSA) and director of communication and investor education for the Alberta Securities Commission.
To help you protect yourself – and your money – from fraud, Ms. Van Brunt presents five common investing myths, and explains why you shouldn’t put your money on them:
1. The person offering me the investment opportunity must be an expert.
Maybe, maybe not. To ensure you don’t get fooled by slick appearances or a fancy title on a business card, do your research. Start by checking if the individual or firm is registered by the securities regulator in your province or territory.
For Ontario, visit the website of the Ontario Securities Commission. For all other parts of Canada, visit www.aretheyregistered.ca, a registration search service of CSA.
2. All professionals who offer financial services are the same.
There’s a range of professionals offering different types of financial services and products. It’s important to understand what services a prospective financial adviser is offering you and whether any of these services are regulated. To check this information, contact the securities commission in your province or territory, or check the registry list at
www.aretheyregistered.ca In Ontario, visit the Ontario Securities Commission website.
3. Background checks are a hassle and take too much time.
A general Google query, combined with a search through www.aretheyregistered.ca or the Ontario Securities Commission registry page, can yield a lot of information in a matter of minutes. It also takes little time and effort to check the disciplined persons list and cease trade orders database on the Canadian Securities Administrators website (www.securities-administrators.ca) to see if disciplinary decisions or cease trade orders have been issued against individuals and/or companies.
4. My adviser is registered, so that makes everything okay.
You are commended for checking that your adviser is registered, but that doesn’t mean he or she is a good fit for you. It’s important to ensure the adviser understands your goals and is willing to work with you to meet them. This means taking the time to assess your current financial and personal situation, your investment objectives and risk tolerance. Personality fit is also a critical consideration; if you don’t feel comfortable with an adviser, building a relationship of trust can be difficult.
5. Once I’ve met and established a relationship with an adviser, my work is done. I can just sit back and watch my money grow.
It takes two to invest with an adviser, and you’re one of the two. Expect to meet with your adviser regularly to review your investments and ensure that your goals continue to be met. Let your adviser know right away about any material changes in your life, such as the birth of a child, a divorce or the death of a spouse or partner. It’s your money, so take an active role in how it is invested.