Responsibility of a financial advisor

Q – Does a financial advisor/planner or their company have any concrete responsibility for their management of a person’s retirement investments, especially if they do not appropriately match their client’s risk willingness?  We feel that our advisor pressured us into some higher risk decisions this last year, despite our asking to do things otherwise. – S.F.

A – Both the advisor and the company are responsible for ensuring that recommended investments meet an investor’s risk profile. This is determined by the completion of a detailed questionnaire at the time a new client is taken on. Financial regulators have become much stricter about enforcing the “Know your client” rule in recent years, and several court decisions have gone in favour of investors who claimed they were pushed into unsuitable securities.

I suggest you arrange for a meeting with the advisor and his or her supervisor to discuss your concerns. If this does not result in a satisfactory resolution of the problem, then you may wish to file a complaint with the Investment Dealers Association or consider legal action. – G.P.