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How To Do A Background Check On Your Advisor

 

The victims of Bernie Madoff and Earl Jones didn’t see what hit them until after the fact. These poor swindled investors all thought these were stand-up guys. Don’t make that same mistake – con men are smooth operators. Take a few minutes and do your own digging – here’s how:

How To Do A Background Check On Your Advisor

There are many different regulatory bodies in Canada and a securities regulator for each province and territory. It’s confusing so here’s a step by step guide of what to do…

Check To See If They Are Even Registered

1. Canadian Securities Administrators > National Registrant Search – this is a quick search for anyone registered to advise or sell securities in Canada (except Ontario, see the next step)  – CLICK HERE TO START YOUR SEARCH – All the boxes should be checked (except the “Clear All” box). Here’s a screen shot of what the settings should be. Don’t freak out yet if your advisor isn’t listed here, keep reading.

Click to enlarge

1(A). Ontario Securities Registrant Search – Don’t ask me why, because I don’t know, but for Ontario securities registrants you have to go straight to the OSC (Ontario Securities Commission) website as it is not handled by the Canadian Securities Administrators tool. CLICK HERE TO SEARCH ONTARIO SECURITIES REGISTRANTS.

Still haven’t found your advisor? Again, don’t freak out yet. I estimate only 125,000 of the roughly 200,000 financial advisors in Canada will be covered by Steps 1 and 1A. Some advisors are only “Life Insurance Licensed” and won’t show up in these first steps (and some may show up in all steps!).

2. Other Provincial and Territory Securities Registrant Searches

You never know, if you didn’t see your advisor yet, they may still be securities licensed but listed under the provincial commission websites. Step 2 is to check here. I would encourage you to check here even if you found them above – couldn’t hurt.

Still Haven’t Found Your Advisor?

Again (because why would it be easy?) you still have more places to check before getting anxious… Now we can assume your advisor is either a Life Insurance Agent (many of whom provide investments as well as life insurance policies), or is exempt from registration (you can check with your provincial regulator from one of the links above – call and speak to someone), or just maybe – they might possibly be the next Madoff or Earl Jones

3. Check for insurance licenses

  • Alberta – Alberta Insurance Council – Web Search Form
  • British Columbia – Insurance Council of British Columbia – Web Search Form
  • Manitoba – Manitoba Insurance Council – Web Search Form
  • New Brunswick – Department of Justice – Insurance Branch – Web Search Form
  • Newfoundland and Labrador – Try calling 709-729-2570
  • Northwest Territories and Nunavut – Try calling 867-873-7308
  • Nova Scotia – Office of the Superintendent of Insurance – Web Search Form
  • Ontario – Financial Services Commission of Ontario – Web Search Form
  • Prince Edward Island – Web Search Form
  • Quebec – Autorites des Marches Financiers – Web Search Form (only available in French – can someone in QC confirm this check for insurance agents? I think it checks both securities and insurance registrants, but I’m not 100% sure)
  • Saskatchewan – Insurance Councils of Saskatchewan – Web Search Form
  • Yukon – Try calling 867-667-5111

Now We Have To See If They’ve Been Naughty

Next you should take a look to see if there have been any disciplinary actions taken against your advisor in the past…

IIROC Licensed Advisors

If they are licensed to sell stocks, ETFs or other individual securities (over and above just mutual funds) they are regulated by IIROC (Investment Industry Regulatory Organization of Canada) and you can do the following checks:

  1. Disciplinary Search: CLICK HERE
  2. Information Request Service: CLICK HERE – IIROC will return any public information within 7 days about the advisor in question that might be of “interest”

MFDA Licensed Advisors

If they are licensed to primarily sell mutual funds they are regulated by the MFDA (Mutual Fund Dealers Association) and you can do the following checks:

  1. Current Disciplinary Hearings – CLICK HERE
  2. Past Disciplinary Hearings – CLICK HERE
  3. Scheduled Disciplinary Hearings – CLICK HERE

Last But Not Least: Google Search Them

Just type in the advisor’s name (common names, full names, etc.) and if the name is very generic, then try narrowing it down by adding “advisor” or “financial” or the city in which they practice. A lot of advisors won’t have a big web presence, but this search might alert you to “other” red flags that you haven’t found from the above steps.

What If Something Doesn’t Look Right?

If the advisor is not registered, has had any actions against them, or has funny google results – call or email them with your concerns. You should be able to take it from here…

Good luck!

Preet

Related posts:

  1. New Tool To Search Advisor Background and History
  2. Earl Jones
  3. Providing the Website for The Yukon Securities Office is PROHIBITED!

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About Preet

Preet Banerjee is a Canadian personal finance commentator. He is a television host for The Oprah Winfrey Network, a Money Expert for The W Network, a personal finance columnist for The Globe and Mail, and a regular panellist on CBC's The National with Peter Mansbridge. He also appears frequently as a guest commentator on a variety of other programs and media.

Comments

  1. Great post, Preet! Thanks. The National Registrant Search should make this much easier for Canadians, but providing the provincial links helps cover the various exceptions that could come up. Your provincial securities regulator is a great resource for any investor.
    Also worth noting: contact your local Better Business Bureau to check if complaints have been filed against an adviser or firm.

  2. Thanks for the links. This is very good to have. Just like finding a contractor for renovations, I would recommend you talk to more than one and take your time.

  3. ALN says:

    Great post Preet. My colleague forwarded to me and I've already passed it along. Now if only I could hire you to do my financial planning for me…:-)

  4. dab8191 says:

    As someone who works in the industry I think this is a great idea, but I do have one thing to add. Perhaps a section on verifying advisors designations. I know it can't be done for all, but any advisor who has the CFP designation would appear on thier site. http://www.fpsc.ca/directory-cfp-professionals-

  5. Preet says:

    Brilliant suggestion – I'll make sure to add that in over the weekend.