Wealth Advisors: directory of firms

Registration is provincial and territorial, coordinated through the Canadian Securities Administrators, and anyone in the business of trading in securities or advising clients on securities must be registered in each province or territory where they do business unless an exemption applies. The firm's category determines what its representatives may advise on or sell, and an individual's category determines the role they may perform; a single individual may need to be registered in more than one category.

For discretionary work, the relevant categories sit with portfolio managers. The Canadian Securities Administrators set proficiency requirements for advising representatives of portfolio managers built around a recognized investment credential combined with a defined period of relevant investment management experience, with associate advising representatives subject to less demanding requirements and working under supervision. That distinction is worth asking about directly: it tells you whether the person you deal with can exercise discretion alone.

Use the National Registration Search to confirm all of it, and remember that it is the firm, not the individual, that holds your account. Check both names, and check that the firm on the statement is the firm in the register.

The Canadian Investment Regulatory Organization is the pan-Canadian self-regulatory organization that oversees investment dealers, mutual fund dealers and trading activity on Canada's debt and equity marketplaces. Investment dealer activity is governed by its investment dealer rules and mutual fund dealer activity by its mutual fund dealer rules, and some members are registered in more than one category. The practical consequence for a client is the breadth of what can be held in the account and which rule set applies to the relationship.

The regulator's own verification tools split along the same line. An AdvisorReport is available for advisors currently approved with an investment dealer, but not for individuals registered in the mutual fund dealer category, where the regulator directs people to the securities administrators' National Registration Search instead. Running whichever check applies takes a minute and is the only way to see the registration and any disciplinary history behind the person being introduced to you.

Opening a managed relationship is a regulated process, not paperwork. Under the Client Focused Reforms amendments to National Instrument 31-103, whose know your client, know your product and suitability determination enhancements came into force on December 31, 2021, registrants must take reasonable steps to obtain and periodically update information about their clients to support suitability determinations, must understand the products they make available including their features, risks and costs, and must determine before taking any investment action that the action is suitable for the client and puts the client's interest first.

That is why the intake is long and why the questions are personal. Expect to document objectives, time horizon, risk profile, financial circumstances and knowledge, and expect to be asked again when something changes. In a discretionary relationship the agreed mandate is the document that translates all of it into what the manager may actually do, so read it as carefully as you would read a contract with any other professional, and ask what would have to happen for it to be changed.

The Canadian Investor Protection Fund maintains two segregated funds for eligible customers of members of the Canadian Investment Regulatory Organization: an investment dealer fund for customers of members registered as investment dealers, or as both investment dealers and mutual fund dealers, and a mutual fund dealer fund for customers of members registered as mutual fund dealers. Coverage of this kind addresses the failure of a member firm. It is not protection against an investment falling in value, and no registration, oversight or membership makes any investment safe.

LokalMatch's role is narrower still. We publish a directory of wealth advisors by city so you can approach firms yourself. We do not manage money, assess performance, verify anyone's claims about their practice or receive anything connected to an account being opened, and a listing here is not an endorsement, a ranking or a referral.

Compensation arrangements differ between firms and between account types, and the Financial Consumer Agency of Canada points out the incentives involved: someone paid by commission has an incentive to encourage you to invest where they will earn more, while someone on salary may have an incentive to promote their employer's own products and services. Neither is disqualifying, and both are worth knowing before the first recommendation.

Ask the firm to set out in writing how it is compensated, what the account arrangement includes, what is charged separately and what changes if you move to a different account type. Ask as well who is paid for what within the firm, because the answer explains more about the recommendations you will receive than any description of investment philosophy.