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Putting money into the market is always unnerving, particularly when your future financial security depends on getting it right. And with enrolment in public or private pension plans dwindling, coupled with the endless run of low interest rates, there's a paucity of safe investments that offer decent returns. So, many feel they have no choice but to invest their money in the stock market.

Because many of us don't have the financial literacy to navigate this course alone, we seek the services of an advisor we trust will act in our best interests. Our lack of expertise puts us in a vulnerable relationship with our advisor. "Invariably, the advisor is going to have the upper hand in the relationship," says Neil Gross, executive director at FAIR. "We go to our advisors thinking they're going to tell us what product is best for us and what strategy is in our best interest," says Poziomka. But unlike our lawyer or a doctor—they aren't bound by law or oath to put our interests first.

That means that if the advisor can earn more commission by steering a client into a higher-cost investment – even if there's a similar cheaper product on the market – there's nothing really stopping him. Moreover, Gross adds, most salespeople who work for fund manufacturers or for banks that have their own in-house funds aren't really independent. "They're making a recommendation to a client, but at the same time they're being paid by the manufacturer to push its specific product. That creates a whole host of problems." Which begs the conflict-of-interest question: are they salespeople or advisors?

Obviously, the practice of up-selling well-heeled clients doesn't qualify as the crime of the century, especially for those who don't have a stake in the market. But when we're saving for retirement, there's no reason we should be giving the industry more than it already takes in. Here's the impact an extra one per cent in annual fees can have on your investment portfolio.

That's more than $80,000 out of your retirement fund and into the pockets of the advisors and the firms they represent. And no crime has been committed.

And even when there is criminal activity, the odds of catching the perpetrators or recouping losses are not in the investor's favour. "Almost everyone who makes a claim directly [to the firm] will be turned away at the door or offered nuisance money to go away," says Harold Geller, of the Ottawa-based law firm McBride Bond Christian LLP, which pursues cases on behalf of clients who have suffered losses due to negligence of their advisors. "While the dealer's response to the complaint prior to litigation is stacked against clients, the courts are very favourable to a good claim," says Geller.

Next: File a complaint through the Canadian Securities Administrator

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