Checking Up On Your Advisor Is A Click Away

Posted Friday, September 3rd, 2010. Filed Under Corporate - Tips/Tools Blog

Canada has come to be known in the financial world as a “leader” with their financial regulations for the banking industry. In the 1990s our government worked to reduce the debt load and put more stringent rules and regualtions in place on lending and risk. This has paid off for Canada who has felt the ripples of what other countries – US, Britain, Japan, Spain, Greece and so on – are feeling in their own countries.

Canada has now put in place a way to check and see whether your financial advisor has the credentials they claim or has had and run-ins with regulators, the self-policing agency for the brokerage industry. The Investment Industry Organization of Canada (IIROC) has created an online search where simply typing in the advisor’s name and following a link pulls up a record of qualifications and any disciplinary action taken by the agency.

With recent frauds and Ponzi schemes that have victimized investors underscore the need to give investors better tools to verify that their financial advisor is registered and regulated by the securities industry regulator. For employment information you can go back to 2003 and for disciplinary action to 1997.

Know that the one weakness is that if an advisor has had a run-in with another regulator, it may not show up in the report unless the advisor discloses it to IIROC. In addition, an advisor who has left or been expelled from the business won’t generate a report. The system relies on self-disclosure. It is likely that some will choose not to disclose. There is more work to be done however it is a good start.

Some want this type of checks and balances to be standardized across the whole regulatory sphere in Canada – insurance industry and Mutual Funds Dealers Association. It needs to be integrated across the provinces and then Country.

If you are from another country you may want to consider lobbying for this type of regulation – checks and balances. It is time that the people stood up for their rights and are heard!

Good luck. To learn more goto IIROC

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