When people trust financial professionals to invest their hard-earned money, they expect them to have professional education and training. It can come as a shock to find out that the person they trusted with their life savings is unqualified.
The Financial Services Regulatory Authority of Ontario (FSRA) recently launched an online verification tool. It allows Canadians to search for the name of their financial professional to verify their credentials and ensure they are in good standing.
Read on to learn more about this new verification tool, other ways to check credentials, and what steps you should take when you’ve lost money while working with an unqualified professional.
New tool to verify financial professionals
The FSRA has launched a new verification tool available to Ontarians. If you’re looking for financial planning or advisory services, this tool can offer you peace of mind. These financial professionals have met stringent educational requirements, abide by the code of conduct, and must follow the rules to keep their titles.
Which industry designations should you look for?
First, what you need to know is that there are various credentialing bodies and industry designations. The credentialing bodies include:
- Canadian Institute of Financial Planning (CIFP)
- Canadian Investment Regulatory Organization (CIRO)
- Canadian Securities Institute (CSI)
- FP Canada
- The Institute for Advanced Financial Education (IAFE)
The verification tool allows you to look up many titles or credentials. Some examples of financial advisors include Portfolio Managers, Mutual Fund Dealing Representatives, and Professional Financial Advisors (PFA). As for financial planners, you may come across titles such as Certified Financial Planner (CFP), Personal Financial Planner (PFP), or Registered Retirement Consultant (RRC).
Other ways to find a financial advisor
When you’re looking for a suitable financial professional, first think about what kind of advice you need from them. They can offer an array of services from investment advice, estate planning, life insurance, tax planning, wealth management, and retirement planning.
Explore industry groups
You can search for more information about the different types of industry groups that your financial professional may belong to, which include:
- FP Canada
- Financial Advisors Association of Canada (Advocis)
- Institute of Advanced Financial Planners (IAFP)
- Investment Industry Regulatory Organization of Canada (IIROC)
- Mutual Fund Dealers Association of Canada (MFDA)
- Portfolio Management Association of Canada (PMAC)
Find a financial professional
Once you’ve determined which type of financial professional you need, there are different ways to find one that is suitable for you. For example, MoneySense has a helpful financial advisor tool. Also, your bank, credit union, stockbroker or mutual fund dealer can help you open up investment accounts so you can buy investments such as stocks and bonds.
If you’re looking for insurance coverage, you can find an agent at an insurance company to assist you with various products, such as life insurance or home insurance. Furthermore, independent financial planning companies or consultants (such as fee-only advisors) can help provide advice or sell financial products.
Check that your financial advisor is registered
At this point, you’ve likely narrowed down your list of financial professionals you’d like to work with. Before you reach out to them, it’s wise to visit AreTheyRegistered.ca. This website lets you check that they are registered to sell you any products or provide investment advice. It will also tell you if they’ve faced any disciplinary action or have failed to adhere to the rules.
Influx of uncertified “finfluencers”
With a wave of “finfluencers” (short for financial influencers) sharing their financial experience and expertise on social media, it can be challenging to wade through and know who is trustworthy. Unless they are certified, they shouldn’t give investment advice or recommend specific stocks to buy. What’s more, they should be transparent about any paid partnerships or if they receive commissions for sharing any affiliate marketing links.
In reality, even though these social media videos are educational, their loyal followers may feel a sense of FOMO (fear of missing out), which could lead them to use them as investment advice and end up losing money. This new verification tool will help Ontarians weed out those who aren’t qualified to give financial advice.
How to handle a financial professional who isn’t certified
In Ontario, anyone who sells securities (such as stocks and bonds) or offers investment advice needs to register with the Ontario Securities Commission (OSC). Being registered means they must follow specific rules and provide you with helpful advice that fits your financial goals (not theirs).
So, it may come as a surprise when you discover the financial professional or company you’ve been working with isn’t certified or registered. If this happens to you, be sure to contact your local securities regulator.
4 Steps to take if you’ve lost money
You may find yourself in a situation where you’ve lost money from your financial professional. Whether they took action or inaction, gave you poor investment advice, or made unauthorized trades, you have the option to file a complaint to get your money back. Here are the 4 steps to file a complaint:
Step 1: Gather the evidence. Reflect on the problem and determine the solution you’re looking to achieve. For instance, you may ask to correct your account or recoup your money. Be sure to collect all the historical facts pertaining to this situation.
Step 2: Write down your complaint. You can send a written complaint to the financial professional or firm you dealt with. Provide them with what went wrong, a timeline of when this issue occurred and how you’d like this to be resolved.
Step 3: Have proper documentation. It’s vital to record all interactions, including phone calls, meeting notes, emails, faxes, and the contacts you corresponded with. Proper documentation will help make this process go more smoothly.
Step 4: Take timely action. If they ask you questions or need more information, be sure to respond promptly. This will help avoid any further delays.
Step 5: Decide on how to proceed. Once you’ve filed your complaint, the firm is required to respond within 90 calendar days. If you’re satisfied with their proposed solution, you can accept their offer.
However, if the firm fails to respond within 90 calendar days or you’re not satisfied with their response, you can choose between these options:
- Escalate your complaint to the Ombudsman for Banking Services and Investments (OBSI), the independent body responsible for dispute resolution, or the Autorité des marches financiers (AMF) in Québec.
- Take legal action, such as going through small claims court.
Do your research to avoid costly financial mistakes
As Benjamin Franklin once said, “An ounce of prevention is worth a pound of cure.” Do your due diligence to find a qualified financial advisor. Use verification tools to check credentials and ensure those you work with are in good standing.
Ask them to share their education and experience. Just because someone is registered doesn’t mean they will give good quality advice or act in your best interest. At the end of the day, trust your gut. If you don’t get a good feeling about them, find another qualified individual to help you reach your financial goals.
If you’ve landed yourself in debt and would like to turn your financial situation around, the team of experts at Consolidated Credit Canada is here to assist you. Contact us today to find out how.
