Do you know if your advisor is regulated? By whom? Has approval to do what, exactly? What about his or her education and training background? And then there is the issue of whether he or she has a disciplinary record.
Investors could always access information to answer these questions about advisors and other registered staff at investment dealers regulated by the Investment Industry Regulatory Organization of Canada. But it was a rather cumbersome process that involved searching enforcement cases in one area of the IIROC website and requesting the rest of the information separately by mail.
That all changed with the launch last September of the IIROC AdvisorReport. Now investors can get answers to all these questions in one place with an easy-to-run online report that can be useful whether you’re an investing novice or an experienced, sophisticated investor. What’s more, it’s free.
A sampling of the range of information investors can access from the IIROC AdvisorReport:
• the advisor’s educational qualifications;
• list of services he or she has been approved by IIROC to offer to clients;
• the advisor’s employment history; and
• full record of any disciplinary cases involving the advisor and IIROC, including direct links to all related documents.
If your advisor is one of the 28,000+ registered staff working at one of the more than 200 dealer firms regulated by IIROC in Canada, the IIROC AdvisorReport is a great tool. If an advisor is currently approved by IIROC, you will be able to generate a report.
Investor Tip: IIROC maintains a second online database in its Enforcement section that covers all its cases, including those involving advisors who are no longer approved in any function at an IIROC-regulated firm. You can also use this database to search for disciplinary history on a particular firm.
Try the IIROC AdvisorReport service now on the IIROC website. Or, call IIROC staff at 1.877.442.4322 and they will take your request over the phone then send it to you by mail or fax, free of charge.
Here is a more detailed list of what’s included in the report:
The IIROC AdvisorReport provides:
• Personal information, including full name, firm where currently em ployed and registered, and em ployment history with IIROC-regulated firms. (Employment information prior to March 2003 is not available online but can be obtained by contacting IIROC directly at 1.877.442.4322.)
• IIROC approval categories for advisors. IIROC approves individuals to work at IIROC-regulated firms for specific categories of em ployment (e.g. Registered Representative, Investment Representative.) The approval categories are important because they tell investors about the types of products that an advisor is approved by IIROC to trade in.
• Whether other regulators have approved the advisor to work in various provinces or territories. (The Canadian Securities Administrators (CSA) has its own set of conditions for registering individuals to trade securities in Canada’s provinces and territories.)
• A list of industry courses or examinations that an advisor has passed (or is exempt from having to take) in order to maintain his/her approval status with an IIROC-regulated firm. Any non-required courses, diplomas or degrees are not confirmed by IIROC.
• Whether terms or conditions have been placed on an advisor’s approval. Terms and conditions may be imposed to address a regulator’s concerns about an individual’s integrity, financial soundness or proficiency or to restrict the advisor’s activities.
• Information regarding disciplinary regulatory proceedings with securities regulatory authorities, other self-regulatory organizations or non-securities regulators that the registrant has reported to the National Registration Database (NRD).
High Standards: The Benefits of Working with an Advisor at an IIROC-Regulated Firm
• Background Checks. Advisors need to pass financial, professional and personal background checks to secure IIROC approval.
• Education and Training. Only those with the necessary training and education can receive IIROC approval, with specialized courses necessary to deal with areas such as options, managed accounts and futures. A mandatory continuing education program helps advisors stay up to date on rules, products and trends.
• Enforcement. IIROC disciplinary action can be applied when firms or their registered staff fail to comply with either IIROC’s Dealer Member rules or the Universal Market Integrity Rules that apply to marketplace trading.
Other IIROC resources for investors:
• Visit the IIROC website’s Investor section for more information on choosing an advisor, including which questions you should ask.
• Learn about the arbitration program, taking your case to the Ombudsman for Banking Services and Investments and other options available to investors to pursue compensation in the event their firm does not resolve a complaint to their satisfaction.
• More information. Call 1.877.442.4322 or visit the IIROC website.
David Thomas is Director, Public Affairs at IIROC.
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