Area of Law: Investments and Securities
Answer # 277
Resolving problems with your Investment AdvisorRegion: Ontario Answer # 277
There are a number of ways you can resolve a problem with your Investment Advisor. If you have a concern about the way your account has been handled, you may first try to discuss the problem with the company the Investment Advisor works for. Raise your concern with the Investment Advisor, the Advisor’s branch manager, or the company’s Compliance Officer. If you are not satisfied, you can make a complaint to the Investment Industry Regulatory Organization of Canada (IIROC), your provincial securities commission, or the relevant stock exchange.
If you do not know which regulatory organization has responsibility, contact the Ontario Securities Commission (OSC). Inquiries Officers can advise you of the category that a company or individual is registered in, which regulatory organization is responsible, and where to send your complaint.
The OSC does not give out information while a complaint is in progress. The inquiries and investigations conducted are confidential to protect the integrity of an investigation and privacy of those involved.
All Investment Advisors have a duty to deal fairly, honestly and in good faith with their clients. Your Investment Advisor is also required to make inquiries of you to find out your investment needs and objectives, and the suitability of a proposed purchase or sale of a security for you, considering the nature of the investment and the type of transaction being done for your account.
Contact the Advisor’s firm
In general, Investment Advisors are not permitted to make trades in your account without your permission. Some investors prefer to delegate decision-making to a professional investment manager and may set up a discretionary account. If you find that your broker has been making trades in your account without your permission, call the investment firm’s compliance department immediately, following up with a written complaint and documentation. Making trades without client permission is a serious offence and in some cases may occur as part of a larger fraudulent scheme.
File a formal complaint
You also have the option of making a complaint to the Investment Industry Regulatory Organization of Canada (IIROC), your provincial securities commission, or the relevant stock exchange.
If you have filed a complaint with your Advisor’s firm, you don’t need to wait until the firm responds before filing your complaint with the IIROC. You can do so simultaneously, or at any time. The IIROC can take disciplinary action to address undesirable behaviour by individuals or firms. Disciplinary actions can range from issuing a warning to launching an investigation involving formal proceedings and a hearing.
Complaints can be made by calling the IIROC, or by completing a Customer Online Complaint Form. You will be asked to provide specific information, such as the details of your complaint, and relevant documentation, including notes of meetings and discussions.
Arbitrate your dispute
As well as filing a complaint with a regulatory body, you may also be able to arbitrate your dispute with your Investment Advisor. An arbitrator listens to both sides of the dispute and provides a decision that is binding on both parties. Arbitration is a time and cost-effective alternative to court proceedings. More information on the arbitration option is available from the IIROC. General information about the arbitration process is also available in the Arbitration and Mediation section of this website.
Start legal action
Alternatively, after you file a complaint with the IIROC, the securities commission, or the relevant stock exchange, you may also be able to start legal action against the Investment Advisor and the firm that person works for. You will have to show that your case involves more than a decline in an investment’s value.
You now haveoptions: