WealthBar Financial Services Inc. is calling on investors to ensure their financial advisors are working in their best interest as the Vancouver-based robo-advisor firm cites concerns about a possible deterioration of trust in the Canadian investment industry.
Thus, clients should be asking several questions of their prospective advisors — whether robo-advisor or traditional — to ensure they're dealing with well-qualified professionals who will provide them with unconflicted advice.
"Many Canadians are just now getting tax refunds of $1,600 or more and a good number will be looking to invest that windfall," says Tea Nicola, co-founder and CEO of WealthBar, in a statement. "Given recent media reports about poorly trained bank advisors ‘duping customers', we want to make sure they get the help they need to invest the right way."
WealthBar suggests that investors question prospective advisors about their credentials and experience; how their fees work; how they deal with conflicts of interest; and whether they have a legal duty to prioritize clients' best interests.
"Naturally, we'd want to remind our investors that our advisors are fiduciaries and we're happy to explain how we protect clients," Nicola notes. "But whoever Canadians choose to invest with, we just want them to feel sure about their money. When Canadians hear horror stories about investors who feel cheated, that ill will just spreads fast."
Canadian regulators are currently contemplating several reforms designed to enhance client/registrant relationships, including a possible ban on embedded commissions; the introduction of a best interest standard (at least in Ontario and New Brunswick); and a series of "targeted reforms" to existing rules.
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