Addressing material conflicts of interest in adviser-client relationships
January 27, 2022
The Wise Owls program is supported by the RCMP & Alberta Provincial Rural Crime Watch Association, and it aims to educate seniors. Seniors gain the necessary tools to recognize a problem, who to talk to, how to report it and where to go for more information. We provide awareness and education for seniors. While the senior population grows, so does their vulnerability to abuse. Elder abuse is any action or inaction by self or others that jeopardizes the health or well-being of any senior.
Many Albertans work with a registered adviser to grow and maintain their wealth in order to secure their financial future. To achieve the best results, clients must be open and transparent about their finances and goals, and in turn, registered advisers must align investment portfolios and products to meet their clients' timeline and risk profile.
To further enhance investor protection, improve the foundation of adviser-client relationships, and standardize services of investment firms and advisers, the Canadian Securities Administrators, which includes the Alberta Securities Commission, published a comprehensive set of rules known as client-focused reforms. Under these reforms, conflict of interests provisions were implemented on June 30, 2021, with the remaining rules going into effect on December 31, 2021.
With the new client-focused reforms, registered firms and advisers are required to put the interest of the client first when recommending or choosing investments and report all material conflicts of interest in the best interests of the client. What are material conflicts of interest? These are factors that could influence the impartiality advisers should have when recommending investments. For example, there may be situations in which a registered adviser may be paid a higher commission for selling a certain type of investment, which may influence their decision on what to offer their client. If a material conflict arises, the adviser or firm must inform the client in a timely fashion, and detail how they are being addressed in the client's best interest.
Talking with your registered adviser on a regular basis is not only recommended to ensure your investments are on track, but it’s also an important step in taking an active role in understanding your investments. Following these steps can help strengthen your relationship with your registered adviser, allowing you to easily address conflicts of interest as they arise:
- Ask questions and get satisfactory answers: if you are confused by what has been communicated, be sure to ask questions and only move forward when you feel you can make an informed decision. Remember, an adviser works for you! Don’t be intimidated to ask questions.
- Discuss any conflicts of interests: Registered advisers should work on your behalf and in your best interest, so take the time spent with them to understand if the investment products they recommend, or you are already investing in, are right for you. If you feel something may be better suited for your goals, bring it to your adviser and request answers before moving forward.
- Get information in writing: Receiving all information in writing, especially information about any areas of concern, can help you to better assess the investments offered to you and allows you to do so at your own pace, outside of the meeting.
By taking these steps, you can better understand the investment products available to you and ensure that your registered adviser continues to offer you the products that put your interests first.
What should you do if you are a victim of fraud or a scam?
Never be embarrassed if you think you are the victim of a scam. Reporting is crucial to help prevent others from becoming victims. If you do not report, law enforcement does not have the information they need to prevent the crime from happening again or to pursue the criminals responsibly. Report scams and frauds by calling the police on the non-emergency line. (*NOT 911*)
Report crime online!
The RCMP are encouraging all Albertans to report eligible crimes online (select property crimes under $5,000). Reporting less serious crimes online helps emergency dispatch and frontline members focus their time on high-priority calls. It provides a convenient way to share photos to the RCMP as well. These reports assist in crime analysis, aid in establishing trends and patterns, and ultimately leads investigators to the chronic offenders. It also assists in making decisions about how and where to deploy resources. Crimes reported online will be taken just as seriously as crime reported in any other way.
Help reduce crime, report online! #ReportSmart
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