Working with an Investment Advisor

As an investor you have a right to honest advice from your advisor. In turn, you have a responsibility to communicate clearly with your advisor and to keep track of your investments and how they are doing. Having a common understanding and good communication will help you achieve your financial goals.

Your relationship with your advisor may be one of your most important relationships.

What to expect

When you meet with your investment advisor, they will have you fill out a new account application form and a Know Your Client form.

These forms cover:

• Why you are investing (for example, retirement, education, savings)
• Your financial situation (what you earn, owe and own)
• Your risk tolerance
• What kind of investments you are interested in

You should also discuss with your investment advisor:

• Your financial goals
• What you expect to earn on your investments
• What fees you will pay
• How you and your advisor will work together and stay on track

When working with your investment advisor you should expect your advisor to:

• Make clear recommendations
• Explain why they are making these recommendations
• Identify the risks involved
• Discuss any conflicts (for example, whether they get more fees from the product they are recommending you buy)
• Tell you how your investments are doing

Know Your Client: Why this form is so important

Some of the information on the Know Your Client form may seem very personal but it’s essential for determining what investments are suitable for you. Make sure the information in the form is complete and correct before you sign. If it’s not, it could lead to bad advice or come back to hurt you if you ever have a complaint about your advisor.

Remember to ask your investment advisor to update the form whenever your personal or financial situation changes. Always keep a copy for your records.

Switching advisors

Working with an advisor is your choice. If you are not satisfied with your advisor, you have the right to make a change. If you want to change advisors, make sure you:

• Let them know in writing that you are ending the relationship, and keep a copy for your records.
• Cancel any authorizations or permissions you’ve given them, such as transaction authorizations or access to your bank accounts.
• Review past advice you’ve received from them. You should also ask your new advisor to do this as well, using your Statement of Advice (SOA).
• Put a stop on any automatic payments or fees you’ve been making to your advisor.

If you decide to transfer to a new advisor, see choosing an investment advisor for what to look for. If you want to go it alone, here are some tips on self-directed investing.