Are you a novice or an expert investor? Discover the 8 main roles of firms and individuals who offer investment products.

There are several categories of individuals and firms operating in the investment industry. Identifying your needs and objectives will help you find the one that’s right for you.

  1. Invesment dealers
  2. Mutual fund dealers
  3. Scholarship plan dealers
  4. Exempt market dealers
  5. Portfolio managers
  6. Life and health insurance firms (insurance of persons)
  7. Financial planners (F. Pl.)

1. Investment dealers

  • 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 bond
      Real return bond
      Convertible bond
      Savings bond
      Retractable bond
      Unsecured bond
      Etc. 
      ;
    • 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. 
      .
  • 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 you are dealing with is authorized to operate as a dealing representative (investment dealer). Simply call the AMF Information Centre at 1 877 525-0337 or consult the Register of firms and individuals authorized to practise, on the AMF website.

2. Mutual fund dealers

Check that the individual you are dealing with is authorized to operate as a dealing representative (mutual fund dealer).

3. 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 you are dealing with is authorized to operate as a dealing representative (scholarship plan dealer).

4. 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 intended 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 you are dealing with is authorized to operate as a dealing representative (exempt market dealer).

5. 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 is authorized to operate as an advising representative (portfolio manager).

6. 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 is authorized to operate in insurance of persons or group insurance of persons.

7. Financial planners (F. Pl.)

  • These individuals help you create a financial plan by preparing an action plan adapted to your investment needs, constraints and objectives.

Check that the individual you are dealing with is authorized to operate in financial planning.

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