Firms and individuals serving investors

There are several categories of people and firms in the investment field. Make sure you understand your needs and goals in order to better determine who you might be doing business with.

These firms offer a wide variety of investments such as:

  • sharesA share, also referred to as stock, is an equity security that entitles you to an ownership interest in a company.
    The company can distribute a portion of its earnings to shareholders by paying them a dividend.
    The shares of companies listed on an exchange are bought and sold at the exchange.
    When a company ceases to operate, the proceeds from the sale of its assets are used to pay its debts and taxes, and the rest of the money is distributed to shareholders.
  • bondsA bond is a security issued by governments and companies through which an investor lends money to the issuer.
    In general, the government or company promises to pay the investor interest at a fixed rate and at certain intervals (for example, 2% per year). Interest is normally paid twice a year. At maturity, the government or company pays back a predetermined amount that is called the face value. The face value is usually $1,000.
    There are several types of bonds:
    Stripped bondReal return bondConvertible bondSavings bondRetractable bondUnsecured bondEtc. 
  • securities of exchange-traded fundsAn exchange-traded fund (ETF) is an investment fund whose securities are traded on an exchange like shares.
    These funds generally track a benchmark index. Unlike a mutual fund manager, an ETF manager does not seek to maximize the fund’s return but only to follow an index; this explains the typically lower management fees for ETFs. 

The firms and individuals authorized to sell you investments

Investment dealers

There are two types of investment dealers:

  • Some provide advice and a full range of services, such as analysis, research on securities and portfolio management.
  • Others act as intermediaries by buying or selling securities according to your instructions, without giving advice.

Check that the individual selling you the product has the right to practise as a dealing representative of an investment dealer. To verify registration, contact the AMF Information Centre or consult the Register of firms and individuals authorized to practise.

Consult the register of firms and individuals authorized to practise

Check that the individual you are dealing with has the right to practise as a dealing representative of a mutual fund dealer.

Consult the register of firms and individuals authorized to practise

Scholarship plan dealers

  • These firms only offer unitsInvesting in a mutual fund gives the investor units in the mutual fund.  in scholarship plans.
  • Consult the page on Registered Education Savings Plans (RESPs) to learn more about RESP plans and contributions.

Check that the individual selling you the product has the right to practise as a dealing representative of a scholarship plan dealer.

Consult the register of firms and individuals authorized to practise

Exempt market dealers

  • These firms offer investments that may be sold without a prospectusA prospectus is a detailed information document that a company must prepare to be able to sell securities (such as shares) to the public.
    It must provide full, true and plain disclosure of all material facts likely to affect the value or market price of the security in question.       (prospectus exemption).
  • These dealers are for investors who have a minimum amount of earnings and assetsThe assets of a person or a company are everything that belongs to them. These assets may be tangible (such as a computer or a building) or intangible (such as patents, trademarks or copyrights).
    Assets are the opposite of liabilities, which represent the debts of the person or company.      and who can assume more risk.

Check that the individual selling you the product has the right to practise as a dealing representative of an exempt market dealer.

Consult the register of firms and individuals authorized to practise

Portfolio managers

  • These firms manage your investment portfolio according to your objectives.
  • They make decisions to help reach your objectives and negotiate on your behalf with a dealer.

Check that the individual you are dealing with has the right to practise as an advising representative of a portfolio manager.

Consult the register of firms and individuals authorized to practise

Warning

Client Focused Reforms: obligation to address material conflicts in your best interest

Your investment firm must now tell you, through its representative, how it is addressing or avoiding material conflicts of interest.

For example, your representative may get paid a higher commission for selling you a certain type of investment. This could create a situation where your representative could lean towards recommending this product even though another lower-cost product may be equally suited to your situation or needs. Your representative and the investment firm must either address this conflict in your best interest or avoid it. Also, before recommending an investment product to you, your representative must make sure the actions taken to address any potential conflict of interest put your interests first.

What will be offered to you?

The registered firm must provide you with information about any limits on the investments they offer, and the costs and risks associated with them. Among other things, it will  tell you if you will be offered only proprietary products. If so, ask your representative to compare the proprietary products to similar products offered by the competition.

End of the warning

Life and health insurance firms (insurance of persons)

  • These firms offer individual life and health insurance products or individual annuities available from one or more insurers.

Check that the individual you are dealing with has the right to practise in insurance of persons or group insurance of persons.

Consult the register of firms and individuals authorized to practise

Financial planners (F. Pl.)

  • Financial planners help you reach your financial goals by preparing an action plan tailored to your investment needs, constraints and objectives.

Check that the individual you are dealing with is a registered financial planner.

Consult the register of firms and individuals authorized to practise

This list is not exhaustive; it covers the firms and individuals that most investors deal with.

Documentation and tools