Understanding your Investments

Be an Informed Investor

Once you have set your personal financial goals and selected a financial adviser your next step is to decide what to invest in. The same investments do not work for everyone.  A registered adviser can help you assess your financial needs, goals and tax situation. They can also help you build a portfolio and recommend suitable investments for you.

Being an informed investor means never investing in something that you don’t fully understand and never signing documents that you have not read carefully. Always ask the following questions before you buy:

  • How will the investment make money? Does it pay interest or dividends? Does it have the potential to go up in value? If so, what needs to happen for it to go up in value?
  • What are the total fees to buy, hold and sell the investment? Are there any penalties or fees if I have to sell the investment quickly or before its maturity date?
  • What are the specific risks? Could I lose some or all of my investment?
  • How easy would it be to sell if I needed my money right away?
  • Does the investment fit with my goals and risk tolerance?

Working With An Adviser

Getting advice may be worth it if you are not comfortable putting together an investment plan or choosing investments on your own. For example, you may not have the time, interest or knowledge to build a portfolio that fits your investment goals and comfort level with risk.

Make sure you understand how your adviser is paid and think about how this may impact the advice they give you. Before you invest, be sure to understand how the fees and other costs will affect your returns and ask about other investments that may be suitable for you at a lower cost.

Find out more about working with a registered investment adviser visit aretheyregistered.ca.

Client Relationship Model Phase 2

The Canadian Securities Administrators (CSA) has introduced new requirements to ensure investors receive essential information about the cost of their financial advisers advice and how their investments have performed. These requirements are known as phase 2 of the Client Relationship Model, or CRM2.

Helpful Tools:

Know What to Expect from Your Registered Investment Adviser  – When you open an account with a registered investment adviser, there are important things that you should know about the relationship that you will have with your adviser.

Know What You Pay When You Buy or Sell an Investment  – Before your registered investment adviser buys or sells an investment for you, they must tell you the charges you will have to pay for the transaction.

Know Your Investment Account Performance   – Every year your financial adviser’s firm must provide you with an investment performance report. This report will list all your investments, the return on your account, the market value of all deposits and withdrawals, the change in market value and rates of return.

Know the Cost of Your Registered Investment Adviser   – Every year your investment adviser’s firm must provide you with a charges and compensation report. The report covers account operations costs, transaction costs and amounts paid by third parties.