Thursday, May 25, 2017

Self-Protection Checklist for Seniors

We're pleased to provide a Checklist that should help you protect your savings nest egg. Once you retire or stop working full time, there is little room for error when it comes to your investments. A loss when you are 35 years old gives you years to recover—and leaves you the opportunity to delay retirement if you must-but a mistake when you are 65 or 70 years old can be devastating and irrecoverable. Elderly investors are disproportionately targeted by unscrupulous brokers (aka “advisors”).The Investment Industry Regulatory Organization of Canada has published Guidance for dealers on how senior investors should be treated and protected.

Here's a Checklist you can use to assess the actual treatment you have received:


·         Does your broker use a title that truly reflects his/her qualifications? Be aware many brokers use made up titles like VP that are unrelated to their qualifications or registration. His/her actual registration is Dealing representative or salesperson. Check for any limitations or disciplinary actions.

·         Does your broker routinely explain products, costs and associated risks before selling them to you?

·         Ask your broker regarding his experience in managing a RRIF account that requires a minimum annual withdrawal and special skills.

·         Ask your broker if you have been sold any product ( like a mutual fund sold on a deferred sales charge basis) with early redemption penalties or minimum hold periods? If so, ask why.

·         Ask your broker to demonstrate with comparative mathematical calculations that your account type is the most appropriate and cost-effective for you. ?

·         Do you receive confirmation slips from your dealer for each transaction?

·         Do you receive a Monthly account statement? Do you check it for errors or unexplained or confusing transactions?

·         Has your broker provided you with a report detailing your rate of return for each account and the annual fees you have paid?

The relationship

·         Do you have a well-articulated Power Of Attorney specific to investments filed with your dealer? (as applicable)

·         Did your broker develop a documented Investment Policy Statement with you?

·         Did your broker ask you to provide a trusted person contact?

·         Did your broker tell you that he/ she works to an advice standard that is not required to be in your best interests? i.e. it is not a fiduciary standard.

·         Were you informed as to how your broker is compensated?

·         Were you informed by your broker of any conflicts-of-interest

Know-Your Client

·         Do you and your broker have a common understanding regarding the objectives for each investment account?

·         Do you and your broker agree on the time horizon for each account?

·         Are you comfortable that your broker understands your risk tolerance and capacity? Your true level of investment knowledge and experience?

·         Are you and your broker clear as to the composition of your net Worth?

·         Has your broker asked about your cash flow needs?

·         Has your broker asked as to the composition of your annual income? If not, consider informing him/ her.

·         Has your broker asked about your debt obligations? If not, consider telling him/ her.

·         Has your broker asked about your insurance coverage? You decide if he should know this.

·         Have you informed your broker of any medical issues that may be relevant to his/ her provision of advice?

·         Do you have a signed/ dated copy of your Know-Your-Client (KYC) form?

·         Has your KYC been updated at least annually?

Red Flags

·         Ask your broker whether he/she is licensed to sell other products like annuities or Segregated funds? If so ,be aware you might be sold a product that is not processed through your dealer and could be unsuitable for you .

·         Has your broker asked you to sign blank forms? If so, raise a Red flag.

·         Has your broker tried to borrow money from you? If so, raise a Red flag.

·         Has your broker attempted to get you to make investments not processed through the dealer? If so, raise a Red flag.

·         Has your broker attempted to have you assign them as a trustee or executor? If so, raise a Red flag.

·         Are you being pressured to take out a Home Equity Loan or establish a margin account? If so, raise a Red flag.

·         Have you been asked to write a cheque in the broker's name or the name of an entity other than your dealer? If so, raise a Red flag

·         Have you been asked to increase your risk tolerance for no apparent/valid reason? If so, raise a Red flag.

Complaint handling

·         Were you informed on how to file a complaint?

·         If you have filed a complaint and are not satisfied with the response, escalate the complaint within the firm. Consider getting some help in articulating your complaint.

·         If you have a complaint or issue with your account, act quickly. If your dealer is bank-owned do not allow the dealer to nudge you to the internal:” ombudsman”.

·         Has your dealer informed you that if you are dissatisfied with their handling of your complaint, you can refer it to the Ombudsman for Banking Services and Investments (, an independent and free dispute resolution service?

NOTE: For seniors, many investor advocates consider a fiduciary duty as an important consideration in the client-advisor relationship. Tell your broker IN WRITING, that you are relying upon them 100% for fair, honest and professional investment advice that is entirely in your interest and in the interests of none other… other-words, you are assuming that your financial relationship with the broker is one of a fiduciary level of care, as it is understood in law. Ask them to confirm this in writing to you and to reply if they cannot confirm this standard of care to you in writing. If not a fiduciary, you may be sold products and services that, while not unsuitable, may not be optimum for you and may be more expensive than other available alternatives.


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