Issues

Magazine Cover for January 2022
January 2022

The investment industry is just....so strange.

But first, Happy New Year!

As the New Year turned over, the investment dealers in Canada and advisors have to dealwith a new regulatory requirement, known as the “Know-Your-Product” rule.

Seriously, we can’t make this up. Only now do advisors need to understand their products.

In 2022, for the first time ever, advisors are now ‘required’ to perform due diligence on the products they sell, and to ensure those products are appropriate for you, the investor.
Investment Dealers need to perform due diligence on products, and if a security has complex or unique features making it difficult to fully understand, the Dealer may conclude that the
security should not be made available to a certain class or subset of retail clients.

Examples of difficult securities could be: leveraged and inverse ETFs, principal protected notes, asset backed securities, and derivative instruments.

Yep, you are reading that right. Only now, in 2022, do investment advisors actually need to know what it is they are selling.

Now, we could fill this page with comments about the bureaucracy and red-tape that is involved in the investment world, but that would just be boring.

Rather, we will again remind Money Savers, make sure YOU fully understand what you are buying. Review what it is you now own, because your advisor, until now, wasn’t even required to understand what they were pitching to you. In other words, this same statement applies, even with this regulatory change: NO ONE CARES ABOUT YOUR MONEY MORE THAN YOU, and at the end of the day make sure YOU are the one that knows what you are doing.

Sharing with You,
Peter Hodson, CFA, Editor

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