Know Your Rights as An Investor
Investing your hard-earned money is a significant financial step. Whether you are new to investing or a seasoned pro, it’s crucial to understand and defend your rights as an investor. If you are investing through a firm regulated by CIRO there are a range of protections and rights to ensure you can invest with confidence. In this article, we will look at the key rights you should be aware of as an investor.
As part of the rules set and enforced by CIRO (Canadian Investment Regulatory Organization) to protect investors, you have the right as an investor to:
Be treated fairly, honestly and in good faith.
- Fairness is at the center of investor rights. You should expect honest and clear treatment from investment firms and advisors. Misleading practices, fraud, or misrepresentation should never be accepted.
- Your personal and financial information is sensitive and should be treated as such.
- You have the right to participate in a market that is free from manipulation and where investors have access to information.
- You have the right to access your funds in a timely manner and receive information about any restrictions or limitations on access.
Receive advice that is suitable for you and puts your interests first if you are working with an advisor.
- Your advisor must work with you to understand your personal and financial circumstances, investment needs and objectives, risk profile and investment time horizon. Any investment recommendation your advisor makes must be suitable for you and put your interests first. This means they should not push you into risky investments or strategies unless they are suitable for you.
- You have the right to question your investment advisor to understand how their advice fits you and your circumstances.
- Your advisor must also get your permission before they act on your behalf, such as buying or selling investments, unless you have given your advisor “discretionary” authority.
Receive accurate information including details about your fees, costs and investment performance.
- One of your primary rights as an investor is the right to receive accurate and timely information about your investments. You have the right to know the risks involved, the fees you are paying, and the performance of your investments.
- You should receive regular reporting on your account including account statements with details on your investment positions and transaction history, cost and performance reports. This allows you to monitor your investments, understand the costs of investing and make informed decisions.
- 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 and ask if there may be more suitable products for you.
Be informed if your investment advisor has a conflict of interest.
- The advice you get should depend on what's best for you financially. It should not be based on your investment advisor’s own interests (for example, recommending an investment because they will get paid more).
- If your advisor has a personal interest that could affect their advice to you, like earning a commission or owning shares in the company they recommend, you have a right to know about it. This is considered a conflict of interest and your advisor must tell you about it.
- Your advisor must address the conflict in your best interest, not theirs.
Make a complaint.
- If you are not satisfied with a financial product or service, you have the right to make a complaint to the firm, for the complaint to be handled fairly and to seek resolution to the problem. If you feel there has been wrongdoing or misconduct in the handling of your account you also have the right to complain to CIRO directly. Please go to the How to Make a Complaint section for more details on how to make a complaint and your options if you are seeking compensation.
Knowing your rights as an investor is important to protecting your financial future. These rights are designed to protect you from unfair practices, ensure market integrity, and allow you to make informed investment choices. If you ever feel that your rights are being abused, don’t hesitate to reach out to the appropriate regulatory authority like CIRO or your provincial securities commission for assistance. By defending your rights, you can invest with confidence and peace of mind in Canada’s financial markets.