Know Your Rights

When you work with an investment advisor, it is important to know your rights as an investor.

You have the right as an investor to be treated fairly, honestly and in good faith.

Your investment advisor is required by law to be fair, honest and to faithfully perform the services they offer.
Honesty does not only mean answering your questions truthfully. It also means giving you information that affects your financial decisions.
Fairness includes not feeling pressured or rushed into making decisions, or keeping important information from you.
You should also expect advice that is objective and suits your specific needs and circumstances.

The advice you receive should be based on the benefits to you, your financial circumstances, and your financial goals. It should not be based on your investment advisor’s interest (for example, because they will get paid more).
If your advisor has an interest that could affect their advice to you, such as earning a sales commission or owning shares in the company they want you to invest in, you have a right to know about it. This is considered a conflict of interest.
Your advisor is required to resolve the conflict in your best interest, not their interest. For example, if they can recommend two investments that are similar, but one is cheaper for you because it provides a lower commission to your advisor, they must recommend the cheaper product.
Your advisor must tell you about the conflict of interest, and allow you to decide whether you want to accept their advice or get another opinion.

Your advisor’s recommendations should help you meet your goals, within the level of risk that you have discussed.
This requires the advisor to know and understand your investment goals and risk tolerance.
You have the right to question your investment advisor to understand how their advice fits you and your circumstances.
Your advisor must also understand the products they recommend to you.
They cannot sell or recommend products or investment strategies that are not suitable for you.
Remember that your advisor does not necessarily have to recommend the best product, just something that is suitable for you and meets your needs.

Your investment advisor is required to provide you with information when you open an account, and each following year, about the fees that you will be charged or have to pay.
You have the right to fully understand the different fees and charges that you are paying for different services and products.
Your investment advisor should be able to clearly show and explain the fees and charges you will be paying.
Your investment advisor also has to report annually on how well your investments are performing.
You have the right to ask questions and get a clear response about why your investments may have gone down, or up, in value during the year.

Your advisor is required to keep records and send you account-related information regularly.
The information your advisor gives you about an investment must be accurate and contain all the details you need to know.
You have the right to receive official documents describing an investment, such as a prospectus, within a set time.
Your advisor must also get your permission before they act on your behalf, such as buying or selling investments or withdrawing money from your account, unless you have given your advisor “discretionary” authority.
Your advisor must send you written confirmation of any transactions they make for you and should send you account statements regularly.
You also have the right to expect that your investment advisor and firm will keep your personal and financial information secure and private (unless they are legally obligated to disclose it).

If you feel that your investor rights have not been respected, there are steps you can take.
Go to Making a Complaint to learn more.