CBC Marketplace recently conducted a hidden camera investigation, to determine the quality of investment advice dispensed by the five big banks in Canada and five popular investment firms in Ontario. The investigation uncovered ‘atrocious’ investment advice.
You can read more about the investigation on the CBC News website, but here are a few points I'd like to share with my readers:
"The tests revealed a wide range in the quality of advisers. Some performed well, giving clear answers and asking appropriate questions about the tester’s financial situation and risk tolerance. Other interactions, however, [Preet] Banerjee found troubling.
In some cases, information was incorrect or misleading - even in response to direct questions, such as how fees are calculated. Some gave unrealistic promises about returns, including one adviser who said that a $50,000 investment should increase by $10,000, $15,000 or $20,000 in one year.
Others failed to adequately assess the customer’s risk profile, which advisers are supposed to use to ascertain the suitability of investment products they recommend to a person."*
The good news is that the Ontario Securities Commission will be investigating further:
"Ontario firms could face a test this year, as the Ontario Securities Commission (OSC) conducts a mystery shop to determine the quality of investment advice. While the OSC declined to provide specific details about its test to Marketplace, the results are expected to become public later this year."*
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