By admin on July 4, 2017
These standards refer to the legal standard of care owed to clients.
The suitability standard requires that any recommended investment be suitable given the client’s circumstances. For example, if an investor seeks advice on how to invest to generate income, any product that generates income or has a reasonable yield will satisfy the suitability standard – regardless of the product’s cost or quality. All mutual fund dealers (i.e. regulated by the Mutual Fund Dealers Association of Canada or the MFDA), investment dealers (regulated by the Investment Industry Regulatory Organization of Canada or IIROC), and exempt market dealers are held to the suitability standard. Some individuals licensed under IIROC dealers are also held to a fiduciary standard.
A fiduciary standard, by contrast, requires any investment recommendation to be both suitable and in the client’s best interest. For example, the adviser to the above hypothetical income investor not only needs to make sure that investments recommended are suitable; but the adviser must also be diligent about finding, in the adviser’s assessment, the best products available to help the client achieve their goals. Firms registered as Portfolio Managers are held to a fiduciary standard. Accordingly, portfolio management firms must not only recommend what’s suitable for clients but also what is best.
HighView Asset Management Ltd is registered in the category of Portfolio Manager in Ontario and some other jurisdictions. You can check the registration of every firm in Canada at Canadian Securities Administrators registration check website. You can find HighView’s registration by clicking here.
