Broker/Advisor Disguise and Deception

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Re: Broker/Advisor Disguise and Deception

Postby admin » Thu Nov 29, 2018 9:49 pm

I received this response from the OSC today, in answer to questions about some investment sales agents (registered Dealing Representatives, not Advising Representatives) who were advertising themselves as “Advisors”, "Portfolio Managers”, and “First Vice presidents”, all of which are bogus marketing titles. (adviser is legally spelled “advisER” in law)

The reply from the OSC was professional and informed. I was pleasantly surprised and even a bit embarrassed by some of my former rants about regulators. I may have tarred all regulators with the same brush, when in fact it is only those “team players” at the top who tarnish the entire system. Anyway this reply was thoughtful and factual and of value to the public, so I will share it here. (now if only they would actually apply the law and the rules.....:)

Here is the informative reply and behind it was my question posed to the OSC, in case you are interested:
I have placed in bold, and underlined, some of the more pertinent answers given by the OSC so that they may be more easily spotted by those who need to find the most important info quickly.
On Nov 29, 2018, at 2:02 PM, wrote:
Dear Mr. Elford:

Thank you for your email to the Ontario Securities Commission (OSC). You are concerned about individuals in the investment industry who you believe are misrepresenting their registration categories to give investors a false sense of trust.

You wrote that you recently noticed a financial team at CIBC promoting themselves on TV, radio, and web sites as if they were advisors, Senior Vice Presidents, and also Portfolio Managers.

You specifically refer to two individuals who are registered with CIBC Wood Gundy, which is a business name used by CIBC World Markets Inc. (CIBC WM). CIBC WM is registered in the category of Investment Dealer. As I believe you are aware, Investment Dealers are directly regulated by the Investment Industry Regulatory Organization of Canada (IIROC), a recognised self-regulatory organisation (SRO).

All individuals who are trading, and who are sponsored by firms registered as Investment Dealer, are registered in the category of "Dealing Representative". This is what you see when you look at the CSA website for categories of registration.

As mentioned in previous correspondence to you on this topic, the term Adviser is used in Ontario securities law to describe companies or individuals registered only to give advice about securities. The term “advisor” is not defined in Ontario securities law. The most common Adviser registration category is Portfolio Manager. Portfolio managers typically handle all the investment decisions for an individual’s portfolio, but they cannot carry out trades. All related trading activity based on the PM’s decisions would typically be carried out by an investment dealer.

Portfolio Manager
Apart from the adviser registration category described above, portfolio manager is also an IIROC registration category and refers to registered representatives who have been approved for managing investment portfolios through discretionary authority provided by their clients.

For your reference, IIROC provides a list of IIROC approval categories on their website at this link: ... egories%22

Senior Vice President
This title is not a registration category.
Many companies provide corporate titles that are separate from their registration categories.

What Investors Need to Know
We have also mentioned to you in the past that business titles, designations for courses completed, and professional memberships may be informative, but for investors the important thing to know is the person's registration category. Regardless of a person’s business title or job description, their registration category will tell you what products they are permitted to trade or advise about, and the services they are allowed to provide. It is important to check registration with the appropriate securities regulator or SRO, or on the CSA website. For the individuals you’ve listed the appropriate SRO is IIROC.

You may wish to refer to a response I sent to you on this subject in an email dated May 11, 2015. My former colleague, Jeffrey Fennell, also corresponded with you on this topic, on several occasions. His most recent response was dated June 3, 2011.

You may wish to contact IIROC, if you have further queries about the titles given to registered individuals that it directly regulates. Their contact information is available at this link:


Nicole Plotkin
Senior Inquiries Officer
Ontario Securities Commission


Larry Elford email to the OSC Inquiries:
Date: November 28, 2018 05:10 PM

Subject: An inquiry to the OSC regarding title and registration representation rules and/or what constitutes misrepresentation of titles, job functions and registration categories (Vice President etc)

Dear OSC. I am concerned about persons in the investment industry who misrepresent their registration categories to give investors a false sense of trust.

I have recently noticed a financial team at CIBC heavily promoting themselves on TV, radio and web sites as if they were “advisors”, “Senior Vice Presidents” and also “Portfolio Managers”.

The CSA registration search shows them registered as “Dealing Representatives”, and I am confused as to how these other titles are allowed to be used. I am familiar with the representation rules (Ontario Securities Act sec 44) which seem quite clear about what constitutes representation or misrepresentation.

I am also inquiring about whether or not there are any “exemptive relief” decisions at the OSC on use of the title “Portfolio Manager”? I seem to recall seeing such exemptions in the past and I wonder if that might be the reason that a few persons are beginning to refer to themselves by this title.

Perhaps you could help me to better understand what, if any requirements there are in order to call oneself an “Advisor”, an “Adviser”, a “Portfolio Manager”, or a “Vice President, First Vice President” etc?

Here are the screen images for the specific team that brought this issue to my attention, however I have noticed groups at Richardson also using the “Portfolio Manager” terminology. Thank you for shining a light into any of my questions so that I can become more informed and understand what is being allowed to happen to investors.

Larry Elford
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Re: Broker/Advisor Disguise and Deception

Postby admin » Mon Oct 08, 2018 9:42 pm

A recent article about the poor behavior of Primerica’s mutual fund sales tactics prompted me to check the license and registration search for a number of firms like this one (not sure if Primerica is truly deserving of being called a “firm”, but bear wth me..)

Here is what I found:

Primerica shows up with 6785 total registrants and 6784 “Dealing Representatives (salespersons).
This means that there is ONE person at Primerica who holds the correct license to call themselves an adviser...??

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SUN LIFE is found to have 3450 registrants at the firm in ALL registration categories, and only 20 records found in the category legally allowed to refer to themselves as “Adviser”. I do notice that Sun pretends to dodge the legal ‘representation’ requirements found in Provincial Securities Acts with a clever “vowel movement” or portraying their sales force as “advisORS” instead of “advisERS”. This is still a violation, but it seems to help the regulators think that the public will never figure out the fraud...

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Jumping over the the banks, where the real money is handled in Canada (although the insurance companies are no slouches) we begin with National Bank with 4117 persons registered with the Canadian Securities Administrators (CSA) and twelve (12) are shown to have an Advising Representative registration.

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Next lets peek at one of Canada’s biggest mutual fund manufacturers and sellers, Investors Group. A CSA search turns up a total of 4030 persons today, at Investors, and 3976 of those listed as “Dealing Representatives”.

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Sadly, what the regulators are missing (or are paid to miss?) is that this is a bit like finding out that the College of Physicians and Surgeons is letting 3976 medical industry pill salespersons, falsely represent themselves to the public as if they were “Doctors”.
Imagine how many pills one could sell if all your customers thought you were working under a “Do No Harm” protective duty or care, while truly you were working to get a new condo...THAT is the standard daily practice of most agents/employees of the giant financial firms, and the regulators appear well paid to ignore the ruse...

Jumping to a “top five” bank, CIBC, they show a total of 10585 registrants at the CSA, 95 of which appear in a search for “Advising Reps”.

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TD shows 29025 registrants, with 893 having the “Advising Rep” registration, although the search shows that many of those do not work within TD at all, but merely use TD as a conduit, a “correspondent network”, or as a “back office” to handle trades, statement generation or other office details to persons who work elsewhere or who work independently. The following screen image capture illustrates the smorgasbord of company names who show up under a search within TD:

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I will stop there for now, to not overload this posting, and hope that it might someday be of help to people who are concerned about their money, and wish to learn how easy it is to ‘game’ the system and the regulators. To be continued....
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Re: Broker/Advisor Disguise and Deception

Postby admin » Thu Sep 27, 2018 4:48 pm

Dear #FINA, (Parliamentary Finance Committee)

Canadians are being looted with “purchased” regulator help:

On Sept 18, 2009, the CSA helped deceive Canada when they changed the registration name of ALL “salespersons” in Canada, to the less revealing nomenclature “dealing representatives”

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In the following CSA document from Sept 18, 2009, the license and registration categories of EVERY registered “SALESPERSON” in the Canadian investment industry (brokers mutual fund sellers, insurance fund sellers etc., etc) was secretly altered to the NEW name of “Dealing Representative”.

This had the effect of confusion for any investor, and assistance to investment dealers who wish to purport to the public that their hundred thousand “salespersons” were something more professional, and have a higher duty of care to protect the public. This is a title deception worth hundreds of billions to banks and other investment product sellers...and hundreds of billions in harms to an un-informed and unsuspecting public. When the deception is intentionally and secretly done, it carries the stamp of malevolence.

The CSA is the umbrella organization of the 13 provincial and territorial Securities Commissions, and is 100% industry funded. (and influenced)

This had the effect of using government sanctioned regulators to usurp the public protective mandate of these gov empowers agencies, and to sell out the public. It has succeeded. In January of 2018, the CSA succeeded in deletion of ALL remaining descriptive use of the word “salesperson” in all web sites and Securities Commission material, making it literally impossible for a member of the public to learn what their investment representative is registered as, or more accurately, what that registration truly means for their well being.

All of this internal dealings and secretive deceptions of the public surrounded the CSA and other “stakeholders” creating something called the CRM and CRM2, which is the term for new “client relationship models” promised to better inform the public of the client relationship (while they were actually doing exactly the opposite), and also promise to inform the public about all the fees and costs that the public pays. They deceptively left out any “internal” (management fees inside company-branded products etc) so investors are ONLY told of the costs they pay their “advisor” (fake advisor, dealing rep license...sheesh) and clients are kept in the dark about the internal fees of some of the products they “invest” in.


OSC 2009 SALESPERSON ADVISOR SWITCH.pdf found here on the web ... lement.pdf

if deleted (a standard practice of the CSA) also found here
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Re: Broker/Advisor Disguise and Deception

Postby admin » Fri Jul 27, 2018 2:51 am

the trick of fooling hundreds of millions of investors into fooling that they are easier to dupe, and to take advantage of financially.

A couple of public info items were brought to light this week, further shining light into what I find to be the world’s greatest mind trick...the trick of fooling hundreds of millions of investors into fooling that they are easier to dupe, and to take advantage of financially. I will begin on sharing a real life example that has also come to my this week, but for now, lets give you just two pieces of light, with which to shine into your own financial goes:

#1 is this newspaper article, linked and pasted below

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None of Grande Prairie’s financial advisers are what they appear to be, according to investor advocate Larry Elford.

Out of all the financial professionals in the city, not one is actually a registered adviser with a fiduciary duty to act in the best interests of clients, Elford said. Instead, they are all registered as dealing representatives – or salespeople.

Many go by the title “advisor,” spelled with an “-or” instead of an “-er.” This is done to mislead clients into thinking that salespeople are something other than salespeople, Elford said. Under the Securities Act in Alberta and other provinces, individuals cannot act as “advisers,” spelled with an “-er,” unless they’re registered as such.

“That’s what I found when I went to Grande Prairie, is everybody who’s in the sales business who’s licenced as a dealing rep – someone who represents the dealer, not the customer – those people say ‘trust me, I’m an advisor.’”

Elford said this deception is “the standard industry practice” across the country.

A search on the Canadian Securities Administrators (CSA) website,, shows there are currently about 116,000 people in Canada registered as “dealing representatives” and only about 4,300 registered as “advisers” or “advising representatives.” Those 116,000 are not representing themselves as salespeople or dealing reps, but as advisors or planners, Elford said.

Elford, who lives in Lethbridge, is a former RBC investment manager who analyzes the financial industry. Last year, he testified before the House of Commons Finance Committee, which held hearings on consumer oversight and protection within Canada’s banking sector.

Elford said that over the last two years, during visits to Grande Prairie, he has checked the credentials of each financial professional in the city on the CSA website.

Elford added that many financial professionals don’t even realize they’re registered as salespeople rather than advisers.

“I had no idea what my registration category was,” he said. “I trusted my bank to be honest with me in what I was licenced as.

“I never held a copy of my licence in my hands, because the dealer always takes care of that, whether you’re with a bank or an investors group or Sun Life or whatever.”

Jeremiah Richardson, financial planner with Discovery Financial, agrees that more oversight is needed.

“You can call yourself a financial planner, you can call yourself an estate planner, you can call yourself pretty much whatever you want. In my mind, that’s unfair to individuals who are looking for where they can get the best advice.

“In essence, (a planner or advisor) could be someone who came in off the street, didn’t like the job they were in and were promised they’d make a whole bunch of money by managing other individuals’ retirement accounts. These are individuals who potentially have little to no training, expertise and oversight.”

Richardson said one way to tell if people are truly qualified is to “look for extra letters” on their business cards. Richardson is a CFP, or certified financial planner, a designation administered by the Financial Planning Standards Council. Certified planners are expected to act in clients’ best interests and follow a code of ethics, he said.

“If a client has any kind of issues with my practices, whether they’re deceptive or taking advantage of that individual, I could face significant fines, loss of licencing, basically get kicked out of the industry.”

About 17,000 financial professionals across Canada are CFPs.


#2 is this 5 minute video which tries to explain the self deceiving mind trick in terms I hope will make more people see the magic...

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Thanks for watching! Please share this link with anyone you know, love or wish to help better understand how the financial industry may have a fraudulent Svengali-like hold upon their money. Join me on twitter @RecoveredBroker and on Facebook at the Group called INVESTMENT SYSTEM FRAUD, links below.

Lets make the world a safe place for everyone, not just those who are above the law...

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Re: Broker/Advisor Disguise and Deception

Postby admin » Thu May 03, 2018 10:17 pm

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I was upset enough with just over 3 decades of Conservative Kleptocracy in Alberta during the last election (2015?) and so I even knocked on doors with the NDP candidate in my area, hoping for change.

Well change happened, but when power was obtained and I wrote to the new Alberta Finance minister about our own Alberta Securities Commission (a gov authorized entity under the authority of the Finance Minister) about this regulator having become an industry captured entity, with examples, I was given nearly the identical reply as I had been given by the Kleptocrats.

I am sufficiently shocked at politicians who, upon obtaining power, appear no longer willing to “rock the boat”, and instead willing to allow the public to be harmed rather than their re-election chances to be harmed, shocked enough to seek to place pressure upon them to protect and serve those they promised to serve.

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Re: Broker/Advisor Disguise and Deception

Postby admin » Thu Apr 12, 2018 5:08 pm

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Fair Canada began with funding by the investment industry, with the stated mandate of being a public protective body. However industry experts have long puzzled over whether they are merely another industry con, hiding a bad motive beneath a good facade, or whether their intentions are indeed above board and honorable.

It has been years and years that this suspicion has remained, while they have appeared to say and do meaningful things, but just recently it became evident that their industry funding is clouding or overshadowing truly ethical mandates. Case in point.

A copy is found here. ... -FINAL.pdf

More cynical industry experts informed me that they would not even bother reading the 80 pages and I could not blame them, for truly, is anything meaningful ever gained in 80 pages? Experts learned decades ago that reports needing 80 pages are those reports that need to complicate, confuse and befuddle the truth, and not to reveal it.

This report seems no different, but I did read it, and thankfully they revealed their industry-sided bias by repeating a common industry deception in the FIRST TWO LINES. Here they are:

Executive Summary
Canadian investment firms and their financial services representatives1 (hereinafter referred to as “financial services representatives” or simply “representatives”) serve millions of vulnerable investors, many of whom are older Canadians.

The exact significance of these two lines is this:

Fair Canada is repeating marketing spin and industry platitudes in these two lines which are cleverly and intentionally designed to misinform, mislead and to lead astray any investor who were to read these words and believe them.


Because Fair is caught supporting and maintaining the best kept secret in the investment industry...anywhere. When “fairness, honesty and good faith” would require them to be doing the exact opposite, which would involve revealing, disclosing and explaining how the secret, secretly abuses millions of investors out of billions of dollars.


The secret that Fair helps to hide in these two lines is that there are TWO very distinct kinds of financial advice providers. One is a fraud (when the “advisor” is not legally registered as an “advisor”) and it is usually the commission salesperson, acting on behalf of, and as agent representing the interest of giant investment dealers. This person is usually registered in Canada as a “Dealing Representative” and can be searched online at (keep in mind that the exact category of registration is intentionally made difficult to find,...and that is another bad motive hidden behind a good motive.

The second type of “advice giver” is a true financial professional, usually legally required to act in a “fiduciary” capacity (google it) and someone who CANNOT legally act against the client. THIS is the true investment advice giver, because...well, advice is advice, it is not sales. And sales is sales, and is not advice.

The first fraud is to try and confuse investors to make the mistake of believing that the sales guy is an advice guy....Nope.
The next fraud is to hide the difference between the two types using complication, obfuscation, lying by omission and bullshit jargon. This is what Fair Canada does in the first to lines of their 80 page report on how not to be believing in Fair Canada. They actually perfect the art of complication, obfuscation, lying by omission and bullshit jargon in just two lines. Again I thank them for saving me from having to read 80 pages.

here they are again:

Canadian investment firms and their financial services representatives1 (hereinafter referred to as “financial services representatives” or simply “representatives”) serve millions of vulnerable investors, many of whom are older Canadians.

No human alive (except a malpractice expert:) might read that info from Fair Canada and be able to tell what type of person Fair is referring to, what their license and job description is, and to whom do they owe a legal duty to protect.....and this is by design.

Fair Canada has failed with this industry-talking-line, and for this I thank them. They have cleared up a mystery of whom Fair Canada represents, due to who is paying for their existence. I stand quite prepared to be corrected in time, if other evidence to the contrary presents itself, but for now Bingo! has been called on the Fair Canada smoke and mirror show...

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Re: Broker/Advisor Disguise and Deception

Postby admin » Mon Feb 20, 2017 8:34 pm

Further to WHY FACTS DON’T CHANGE OUR MINDS…New discoveries about the human mind show the limitations of reason.

By Elizabeth Kolbert, The New Yorker ... -our-minds

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How investment broker dealers use sleight of hand to exploit 100 million Americans

‘Card manipulation’ is the branch of magical illusion that deals with creating effects using sleight of hand techniques involving playing cards.

While watching a magician at the Los Angeles Magic Castle, I saw a card manipulation pro do amazing tricks for a five year old girl. She was mystified and certain that what she saw was real and that magic is possible. Absolute wide eyed certainty was on her face. (Effect - how a magic trick is perceived by a spectator)

It reminded me of the schoolteacher I spoke to this week who was concerned about her investments.

Her advisor had put all her investment holdings into a fee-based account, where she was charged 2% each year to ‘manage and advise’ her.

Problem #1 was that she was being told to add 2% to her investment costs, every year. (2% compounded over the long term will cut your retirement funds by half, while putting the other half in the hands of your broker and dealer.

Problem #2 is that she had already bought and paid for all her investments and faced considerable fees and commissions to do so. Not to belabour the point but she had already paid for her investments.

Now the dealer had cleverly devised a totally new way to charge her again. To effectively give themselves on an ‘annuity’ based on every dollar in her account earning them a fee, every day of the year. If this does not meet the definition of abuse of market dominance, I am afraid nothing does.

Problem #3 was that the advisor was faking his license, while cleverly hiding the fact that he held only the salesperson registration, otherwise known as a ‘broker’. This ‘un-prosecutable fraud’ allows commission hungry salespersons to dupe investors by purporting to be licensed fiduciary professionals.



“…financial advisor is generic term that usually refers to a broker By contrast, investment adviser is a legal term.”

These are not insignificant issues and yet they happen to millions of investors, without them being told of the scam.

She opened her computer in her home 1000 miles away and I opened my own. I walked her through the 30 seconds required to find the actual license/registration of her advisor.

I had to do this because without her actually seeing how the trick ‘worked’, something called ‘cognitive dissonance’ (fear of admitting/discovering we are easily fooled) steps in to assure most of us that we are too smart to be tricked so easily.

Most retail investors do not understand the differences between investment advisers and broker-dealers. They are forgiven for being in the dark, because the financial industry deliberately deceives more than 100 million North American investors.

Using sleight of hand, like a card shark or a con artist, the investment advisor of today is allowed to trick over 95% of American investors into a false sense of trust.

Imagine being allowed to lie to investors, in order to gain trust. This is the very same show that the con artist does for a living. Who knew is was standard investment industry practice as well? Who could even imagine? Magicians can. Securities lawyers can. Regulators can. But they are each bound to silence.

This investor was convinced that her advisor was real, that his skills were above her understanding, and that she was only protected if she placed herself and her family money in the hands of the advisor.

The trouble is that the advisor’(salesperson) who advises her on her money did not hold the professional standing adviser license and registration. Wait a minute…didn’t I already say that last line, just a moment ago?

It is time that I helped you spot the distraction. The magic of the con artist, or the magician is to weave a story based upon one or two facts, whilst distracting the audience in subtle and clever ways.

The distraction, performed in over 100 Million bank/broker/dealer accounts [1]

First, hide ones true license or registration from the customer, so they do not find out that you are a salesperson on commission.
Second change the title that you use by one letter, from the legally-meaning term “adviser”, to “advisor”.

That one clever ‘vowel movement’ allows a million commission sellers of stocks, insurance and mutual fund products to pretend to be SEC or state registered ‘advisers’.

It would be like having a career as a pharmaceutical company drug sales rep, and figuring out that one can easily triple sales if I portray myself as a Doctor. I gain greater trust, and more money by lying to my clients. Welcome to the standard daily practice of the 'self' regulated investment industry. See

One has a ‘do no harm’ oath, and the other sells products for commission. One charges approximately 1% and the fee is not subject to sales motivations or product incentives. One must work (by law) for the betterment of the client, and the other works (agency duty undisclosed) for the betterment of the dealer.

Train yourself to learn these key differences and how to spot the ‘trick’ being played on you, and one hundred million other Americans.

Product selling is not advice, and advice does not involve product selling. It is a clever hiding, of the agency duty, the duty to protect, serve and care for the customer, and hiding that a salesperson does not have this same duty to protect you. You are at the mercy of the #1 con in North America, while you are convinced that you are being served by a true professional. Do not feel bad. As I write this perhaps only 100 people in America even believe what I am saying, such is the power of a good con, to cause the victim to mentally ‘lock-in’ the impossibility of him or her being duped. That goes into a topic called ‘cognitive dissonance’.

For 600,000 commission sales brokers. (The million number mentioned above also includes insurance and mutual fund registrants, many of whom operate outside the boundaries of FINRA)

After all, they work for a trusted financial firm, and they call themselves ‘advisor’. Isn’t it safe to assume that our government would not allow consumers to be lied to with such cleverness. Not it is not safe at all. Perhaps it was during the last century, but those days are gone.

Here are some of the links and backstory details for anyone who would like to dig a bit deeper. I hope that some readers will make a careful exploration of this material, and will contact me at (in Canada) if you would like to correct anything here that needs correcting. I would be grateful for those who help me to better understand what I think to be the most costly consumer ‘bait and switch’ scam in the world today.

"When FINRA changed its name from the perfectly accurately descriptive “National Association of Securities Dealers” to the “Financial Industry Regulatory Authority,” many of us suspected that they had a pretty obvious agenda. The brokerage industry self-regulatory organization wanted to position itself as a regulator of everybody, including all fee-only fiduciaries, so it could impose a thousand paperwork-related obstacles to their business health and eventually put this silly idea of working for the customer to rest for good."
Bob Veres

Bob Veres, a Financial Planning columnist in San Diego, is publisher of Inside Information, an information service for financial advisers. Follow him on Twitter at @BobVeres.


Everything below this point is a bit of a ‘reference source’ for my own use and as a ‘curator’ site to keep track of the related material. Read it at risk of being bored to death, and seeing me make notes and reminders to myself. My curator mind is not what it once was and I get deep enough into these stories at times to become quite lost. These notes are my signposts.


Many legally registered ‘advisers’ in the USA, also hold a broker license, which means they hold two different registrations, with two dramatically different duties to protect you the investor.

If you can imagine the comparison, it would be like working with a medical Doctor who was also licensed (and paid) as a pharmaceutical sales representative. They would have two invisible professional ‘hats’ so to speak, and they could switch hats back and forth while dealing with you depending upon whether it was in their financial interests to do so. That is a risk taken with the dually registered ‘broker-adviser’. Here is a video by Tony Robbins explaining in a couple of minutes how that might work against you financially. (OOPS! Video lost, please notify me if anyone can spot the location of an interview Tony did talking about financial persons who hold two difference license/registration categories, as he sums it up pretty well)

Ultimately it is this simple (according to Tony Robbins in the first 23 seconds of this video clip) If you have a fiduciary you pay the cost of money management ONLY. If not you pay commissions ON TOP of the cost of the money management. (The difference will cut your retirement by about half)

========================From US NEWS

Put another way, the question is not whether the dual-licensed broker-dealers are adequately regulated when they act as salespeople, but whether they are adequately regulated when they act as advisers. They get to have their cake and to eat it too. Those who claim to be ‘advisors’ get to eat your cake without even having the license they are claiming.....without even having the professional right to be in the room, so to speak. Hmmm.

What’s at stake, then, is not whether some clients will be able to get advice, but whether some financial professionals will be allowed to profit by giving bad, self-serving, advice. And there is abundant evidence of misrepresentation and obfuscation under the current rules.

In today’s world, workers and retirees face investment decisions that are, at once, deeply confusing and crucially important. In the absence of fiduciary standards, many people will put their trust in salespeople masquerading as trustworthy financial advisors. And many will make huge mistakes as a result – mistakes that can cost tens or even hundreds of thousands of dollars over a lifetime.

When retail investors seek advice from a financial professional, they generally assume that the professional is acting on their behalf. It makes no sense to insist that some professionals live up to that expectation, while letting others exploit it. ... retirement

Advisor has an ‘o’ in it, which should remind you “Uh Oh…somethings wrong”, or simply NO!

Adviser has an ‘e’, which should remind you of the words, “Legal”, “Excellent!”, or simply “YES!”




======== Below this point are links, sources of additional reading for those who wish to dig a little bit deeper into this topic=======

Investment Advisers: An investment adviser is a fiduciary whose duty is to serve the best interests of its clients, including an obligation not to subordinate clients’ interests to its own. (please note that the law in the U.S. and in Canada specifies this term as spelled with ‘er’ at the end)

This is the type of person you have looking after your money, if you have institutional money or are a serious retail investor.

Over 11,000 investment advisers are registered with the State or Securities Exchange Commission (SEC).
As of September 30, 2010, Commission-registered advisers managed more than $38 trillion for more than 14 million clients.

$38 Trillion dollars invested at less than 1% in professional (fiduciary) management expenses, adds up to about $380 billion in investment costs being paid to manage that dollar figure.

(probably will be much less than 1% overall, I have seen institutional money management costs as low as 0.25% on the large accounts) (in the billions)


As of the end of 2009, FINRA-registered broker-dealers held over 109 million retail and institutional accounts. That is almost ten times more investors than have the benefit of a truly licensed professional money manager. (adviser)

These poor retail, mom and pop investors end up with a sales guy, putting on a facade of a professional money manager, adding 2% to 4% additional fees to the costs of whatever investments you own, while STILL having to have the 1% costs of a real professional money manager. I standby waiting to be proven wrong in this point. THIS is the retail investment industry whirlpool that I was caught in for two decades.


It seems that the SEC cannot say (print, speak, warn, publish) the word “Advisor” since it legally does not exist. (there may also be other reasons) Sure you can go and look it up in the dictionary….and convince yourself that it means the exact same thing no matter how you spell it…..but please consider the possibility that the Securities industry has lawyers who have an entirely different view. (or simply insert your own cognitive dissonance here)

I talk to hundreds of industry experts each year, and can count on the fingers of my two hands how many of them are not caught in this cognitive dissonance. Caught in the ‘Effect’ of the con.

The existing securities regulatory scheme that allows broker-dealers to conceal their sales roles, does not offer adequate investor protection when dealing with broker-dealers, since under a suitability standard they generally remain free to put their own interests ahead of those of their customers. They do this part (the concealment) in any magician would.

Investors do not distinguish between broker-dealers and investment advisers, do not know that broker-dealers and investment advisers are subject to different legal standards, do not understand the differences between a suitability standard and a fiduciary duty.

This is the natural result of regulatory policy that has allowed brokers to rebrand themselves as advisers without being regulated as advisers.

As the SEC staff stated in the 913 Study, “Retail investors are relying on their financial professional to assist them with some of the most important decisions of their lives. Investors have a reasonable expectation that the advice that they are receiving is in their best interest. They should not have to parse through legal distinctions to determine whether the advice they receive was provided in accordance with their expectations.”

Broker-dealers who wish to avoid regulation under the Advisers Act could do so by limiting themselves to transaction-specific recommendations while avoiding holding themselves out as advisers or as providing advisory services. In order to ensure clear communication to investors, it may also be necessary for the Commission to require some sort of affirmative disclosure in such circumstances to the effect that the broker-dealer is acting solely as a salesperson and not as an objective adviser. Broker-dealers who complied with these conditions would in effect have a safe harbour from Advisers Act regulation.

Brokerage firms would then face a clear business decision: do the benefits of offering advisory services and marketing themselves accordingly outweigh the costs of regulation under the Advisers Act? Faced with a similar decision when the courts determined that fee-based accounts were advisory accounts, most broker-dealers chose to accept regulation under the Advisers Act.

Investors would also benefit even if certain broker-dealers chose to avoid Advisers Act regulation if the result was that those broker-dealers stopped characterizing their services as advisory services when making recommendations that are not required to promote the best interests of the customer.

This approach would also preserve investors’ ability to choose to receive transaction-based advice subject to a fiduciary duty or non-advisory transaction-based services subject to a suitability standard, and their ability to distinguish between those different types of services would be enhanced.

An important aspect of a broker-dealer’s duty of fair dealing is the suitability obligation, which generally requires a broker-dealer to make recommendations that are consistent with the interests of its customer.


FINRA has primary responsibility for examining broker-dealers. (Financial Industry Regulatory Authority)

For my money FINRA should more accurately be titled FISRA (Financial Industry Self-Regulatory Authority)

Broker-Dealers: The Commission and FINRA oversee approximately 5,100 broker-dealers. (160,000-plus branch offices exist beneath this network of broker-dealers)

As of the end of 2009, FINRA-registered broker-dealers held over 109 million retail and institutional accounts. Approximately 18% of FINRA-registered broker-dealers also are registered as investment advisers with the Commission or a state. Most broker-dealers receive transaction-based compensation.

Retail investors are over 95% more likely to be funnelled into the ‘chute’ of the facade ‘advisor’ than to obtain the services of a licensed professional adviser.


Investment Advisers (FINRA)
"Although most people would use an "o," we purposely spell adviser with an "e" when we talk about investment advisers. That’s because the laws that govern this type of investment professional spell the title this way.” (quote by FINRA about the legality of “adviser”....while they regulate ‘brokers’ only...who represent themselves as ‘advisors’....which has no legal standing anywhere.....but hey, self regulation is great)

Many investment advisers are also brokers—but these two types of investment professional aren’t the same.


160,000-plus branch offices of broker-dealers vs advisory firms (11,100) fifteen times as many broker offices as adviser

nearly 90 percent of investment adviser representatives are dually registered as brokers. (don’t even get me started on the potential for dual-personalities problems....)

FINRA’s market surveillance systems process approximately 50 billion market events on average each day ... nterprises


“160,000-plus branch offices of broker-dealers” ... moY5m.mjjo


Thankfully, Michael Kites can say the word “advisor” with some context about how it is used in US retail investment circles:

If the broker’s investment advice was “solely incidental” to the implementation of brokerage services, the broker didn’t have to register.

Notably, though, the ’40 Act actually did not directly impose a fiduciary duty on such investment advisers. Technically, Section 206 of the Act – also known as the “anti-fraud” provision – merely requires that investment advisers not engage in any acts that are fraudulent, deceptive, or manipulative. It was only later, in the 1963 Supreme Court case of SEC v. Capital Gains Research Bureau, Inc., that these provisions were interpreted to mean that investment advisers owed a fiduciary duty to their clients.

THEREFORE, IF A BROKER STAYS UNDER THE RADAR BY CLAIMING THAT HIS OR HER INVESTMENT ADVICE IS “SOLELY INCIDENTAL” TO THE TRADE…(which may have been the case in the last century)..THEY CAN IN EFFECT BE “EXEMPT” FROM THE REQUIREMENT that investment advisers not engage in any acts that are fraudulent, deceptive, or manipulative.

Over the next 20 years, the scope of brokers providing advice expanded even further, and in an effort to cut down on brokerage industry conflicts of interest the SEC-directed 1995 Tully Committee on Compensation Practices recommended that brokers begin to shift compensation towards ongoing AUM fees, leading the SEC in 1999 to propose the now-infamous rule for “Certain Broker-Dealers Deemed Not To Be Investment Advisers” (finalized in 2005). This so-called “Merrill Lynch” rule would have allowed brokers to offer fee-based accounts – otherwise a form of “special compensation” – but without being required to register as investment advisers, as long as any advice they gave was still solely incidental to the brokerage services and the account was disclosed to be a brokerage and not advisory account.

THIS RULE ALLOWS BROKER DEALERS TO PUSH FEE BASED AND PROPRIETARY (HOUSE BRAND) PRODUCTS but without being required to register as investment advisers.

Michael explains it best how people have snuck up, on the advisor gambit…. ... t-of-1940/


You would think the “incidental advice” rule in the 40 Act would be enough for the SEC to solve the dilemma of the fiduciary standard, a controversy stemming from the fact non-Registered Investment Advisers are allowed to skirt registration by calling themselves “advisors.”

the SEC hasn’t enforced its own rule regarding the provision of investment advice.

For want of a single vowel, the broker industry appears to have seized upon the Holy Grail of loopholes.

By referring to themselves as “advisors” rather than “advisers,” they have duped the SEC into believing their bread-and-butter business is merely “incidental” to their standard business model. ... 29365276cb


Second, enforce the 40 Act’s incidental advice rule and stop allowing brokers to call themselves “advisors,” or worse yet, “advisers.” 

Clearly a person calling themselves an “advisor” is directly, overtly, and purposefully providing advice; it is not ancillary or “incidental” to providing other services.

The public is confused by who is a fiduciary and who isn’t (whether they know or understand the term is not the issue – they do intuitively understand the concept).
This is understandable, since the SEC allows anyone with a brokerage or insurance license to call themselves an “advisor.” How can the public possibly know that their “advisor” is really less an adviser and more a salesman working first for the employer who pays them based on the advice they give.
They do have a fiduciary obligation, but as an agent of the brokerage firm this obligation is to their employer! This is not tough stuff. It is something the SEC could do tomorrow. ... gn=121715z

====== ... -advisors/

This one simple step has the potential to deliver large benefits to retirees and investors. It is also, very plainly, the right thing to do. When retail investors seek advice from a financial professional, they generally assume that the professional is acting on their behalf.
It makes no sense to insist that some professionals live up to that expectation, while letting others exploit it.

When Salespeople Call Themselves Advisors
Updated rules are needed to prevent financial professionals from swindling ordinary Americans.

Saving for retirement is extra-hard these days, and not just because wages are low and millions of Americans are still struggling to make up for ground lost after the 2008 financial crisis. All too often, the difficulty is compounded by gaps in the rules for the financial professionals who provide retirement-planning advice.

As things now stand, too many of those professionals can present themselves as (and enjoy the benefits of being perceived as) advisors with your best interests in mind, yet go ahead and recommend investments that will generate more money for them, and less for you.

It’s a huge problem, and the Securities and Exchange Commission and the Department of Labor are each in a position to fix important pieces of it. The SEC’s part goes back to a 1940 law which gave registered investment advisors a fiduciary duty to look out for the best interests of those they serve, while treating broker-dealers as salespeople with only a looser obligation to recommend “suitable” investments. The Labor Department entered the picture in 1974, when the Employee Retirement Income Security Act authorized it to regulate employer-sponsored retirement plans and some of the professionals who help people make decisions related to those plans.

Nowadays, brokers frequently act as advisors, providing “investment planning” or “retirement planning” expertise; yet the SEC continues to define and regulate them as salespeople. The Labor Department sets a stricter standard for some forms of advice, but its rules, which have not been updated in 40 years, are narrow, excluding many of the situations that matter most, such as advice given to employees about what to do with their 401(k) money when they retire or change jobs. Far too often, the record shows, financial professionals take advantage of the wiggle room between perception and regulation to promote high-commission investment products over alternatives with lower fees, better returns or fewer risks.


FINRA also refers to advisers only with an “E”, and brokers are the only other registration category.

There is no legally meaningful term for advisor, other than to intentionally mislead investors into a false trust.

even ... providers/ cannot say the word “advisor”

And yet over 100 million American investors deal with something which is often called an “Advisor”. Why is that? WHAT is that?

What I really would like to know is how does any industry ‘regulator’ (an impartial referee) come to have $2.3 Billion Dollars in the bank???


Click on image to enlage or zoom in

source doc, ... IR_AFR.pdf

page Nine of FINRA 2015 Year in Review and Annual Financial Report

FINRA Newsroom shows that they regulate over 635,000 brokers at 3,900 securities firms

These people are salespersons, almost always selling on a commission ... 1487645225 testimony to congress

============== ... Report.pdf

Financial Advisor or Investment Salesperson? Brokers and Insurers Want to Have it Both Ways ... -ways.html

Of course the financial industry is the new deception industry....the ‘tobacco’ of the 21st Century.
Larry Elford


Current State of the Investment Adviser and Broker-Dealer Industries

[/size]Investment Advisers: Over 11,000 investment advisers are registered with the Securities Commission. As of September 30, 2010, Commission-registered advisers managed more than $38 trillion for more than 14 million clients. In addition, there are more than 275,000 state-registered investment adviser representatives and more than 15,000 state- registered investment advisers. Approximately 5% of Commission-registered investment advisers are also registered as broker-dealers, and 22% have a related person that is a broker-dealer. Additionally, approximately 88% of investment adviser representatives are also registered representatives of broker-dealers. A majority of Commission- registered investment advisers reported that over half of their assets under management related to the accounts of individual clients. Most investment advisers charge their clients fees based on the percentage of assets under management, while others may charge hourly or fixed rates.

Broker-Dealers: The Commission and FINRA oversee approximately 5,100 broker-dealers. As of the end of 2009, FINRA-registered broker-dealers held over 109 million retail and institutional accounts. Approximately 18% of FINRA-registered broker-dealers also are registered as investment advisers with the Commission or a state. Most broker-dealers receive transaction-based compensation.

Investment Advisers: An investment adviser is a fiduciary whose duty is to serve the best interests of its clients, including an obligation not to subordinate clients’ interests to its own. Included in the fiduciary standard are the duties of loyalty and care. An adviser that has a material conflict of interest must either eliminate that conflict or fully disclose to its clients all material facts relating to the conflict.

Today, the more than 11,000 advisers registered with the Commission manage more than $38 trillion for more than 14 million individual and institutional clients.

In addition, there are more than 275,000 investment adviser representatives registered in the applicable states and more than 15,000 state-registered investment advisers.

As of the end of 2009, broker-dealers held approximately 110 million customer accounts.10 Currently, the Commission oversees approximately 5,100 broker-dealers11 with over 600,000 registered representatives engaging in a variety of business activities, which may or may not include the provision of personalized investment advice or recommendations about securities to retail customers. 13 Of the 5,100 registered broker-dealer firms, 985 have indicated on Form BD that they engage in, or expect to engage in, investment advisory services constituting one percent or more of their annual revenue.14


A Quick Note on Independent Broker-Dealers
A firm qualifies as a broker-dealer if it trade securities on its own account – that is, for the benefit of the firm itself – and also completes trades on behalf of its customers. Firms that only trade for their customers are simply called brokers and are not considered for this ranking. Among broker-dealers there are two major business models. The first is known as a wirehouse broker-dealer, in which a traditional securities firm offers its own financial products and services to investors. The largest wirehouse broker-dealers include powerhouse names such as Merrill Lynch, Morgan Stanley (NYSE: MS) and Goldman Sachs Group Inc.. (NYSE: GS).

Read more: The Top 25 Broker-Dealer Firms for 2016 (LPLA, AMP) | Investopedia ... z4ZOQYCypJ

============== ... ra-license (a good industry-inside resource piece about dual-license registrants...why hold both) Useful for researchers who seek to understand what the industry is doing and why.

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Re: Broker/Advisor Disguise and Deception

Postby admin » Mon Dec 26, 2016 10:13 am

How Billions Of Dollars Disappear From Canadian Investors...Seven Steps

Screen Shot 2016-12-25 at 10.27.31 PM.png

This New York Times article speaks of the US, but illustrates the Fake Advisor gambit on both sides of the border.
Click to enlarge or to zoom in ... .html?_r=1

Fake 'advisors' earn a 'facade of trust', gain exemption from law, allow sale of 'facade' investments,…into Canadian's 'very real' retirement futures.

It is not magic. It is simply the perfectly kept systemic secret...

Downtown Calgary "advisors" found hiding true registration category, holding 'sales', (Dealing Rep) license, instead of 'adviser', license.

By Larry Elford, former CFP, CIM, FCSI, Associate Portfolio Manager
Investment malpractice analyst.

I accepted a challenge from a reporter out west the other day, after I told him that 96% of people who claim ‘trusted advisor” status in Canada do not hold the license, nor the legal duty of a registered adviser. ("adviser" is the legal spelling found in the Securities Act, while regulators say "advisor" is a mere title which anyone can use without being licensed)

I set out to see if I could find a single licensed advisor OR adviser, in downtown Calgary, and to share the results. After two hours on the government authorized registrant check site ( I found that 100% of the advisors in three downtown Calgary bank-owned investment offices held no adviser license or registration. Instead the category of license/registration was in a salesperson capacity, (Dealing representative registration).

The Small Investor Protection Association of Canada, ( has recently searched the entire country, and found that approximately 96% of persons who promise or imply financial “advisor” services to the public, carry only the 'salesperson' registration (dealing representative).

I find it amazing that Canadian’s life savings could be deceived into placing trust and money with licensed salespersons, and I outline the steps to this deception below:

First step: Capture regulatory bodies by ensuring they are selected and compensated by the investment industry itself. This has the effect of having a private ‘regulatory’ force…to police ones own financial behaviour. This step is essential (and valuable) if the public is to be perfectly deceived.

Second step: Pay these ‘regulators’ highly enough to ensure that they know who they are supposed to serve. (the twelve highest paid employees among Canada’s Securities Commissions shared compensation approaching $16 million dollars over the two year span of 2015 and 2016. To be specific, that is just shy of $16 million for twelve people.

Third step: Hide the registration and agency-duty (or lack of duty), of 100,000 industry salespersons (Dealing Representatives) so that investors mistakenly assume they are dealing with a well regulated professional ‘adviser’ and hand over their retirement money willingly. The public is never told they have a salesperson, and the regulators never enforce the “misrepresentation” portions of Securities Acts. ... financial-[url]advisors-are-registered-as-commission-sales-persons-604852516.html[/url]

Fourth Step: Commission sales agents (Dealing Representatives as opposed to lawful “Advisers”) use the deception in step three, to sell investment products of greater advantage to the dealer, and less advantage to their customers. (these salespersons can sell products and give advice based on the lowest agency-duty standard, called the “suitability” standard, rather than the highest standard of the “fiduciary” adviser)

Fifth step: Without needing adherence to the fiduciary standards of a true adviser, they can also sell the public billions of dollars of investment ‘products’, some of which might be improper, illegal, or tainted in some way, in much the same manner as allowing ‘factory defective’ products to be sold to consumers. This is done by receiving from the regulators, “exemption” from the laws of the Securities Act. Facade Investments.

Sixth step: Securities Commissions typically grant thousands of exemptions to public protective laws, in near secrecy from investors and without demonstrated protocol or process.

Seventh step: Provincial Finance Ministers, or those in government authority, are intimidated by the thought of trying to stop the financial harvesting of Canadians, and choose to ignore the misconduct instead. Or as they say in Alberta, “shoot, shut up and shovel”, to protect the political party, while burying the public interest. (partial source data on record) Facade Public Servants.

Outcome: Systemic investment misconduct and malpractice can do financial harm to Canadians, of $25 to $50 Billion (or more) each and every year, with most of this money ending up on the profit statements of our trusted financial institutions. (Stats and partial source data on public record.) What if this is the largest, hidden economic drain, in all of Canada?

In comparison, the financial harms/costs to Canada of the millions of cases of ‘street’ crimes in Canada is estimated to be around $50 Billion each year, according to Justice Canada and Statistics Canada. (Source data on public record.)

Q: Who is protecting Canadians from systemic financial exploitation, misconduct, and malpractice?

To date, I have found no person or agency who is paid a salary to protect Canadians, who is willing to risk that salary and speak out about these industry exploitations.

This is a financial story, a political story, and perhaps a story of a two-tier system of justice. One for the highest status financial corporations, and another for everyone else.

Larry Elford, former CFP, CIM, FCSI, Associate Portfolio Manager,

Misconduct and Malpractice Analyst


In response efforts like this, the Alberta Securities Commission recently released this consumer warning which compares the "dealing representative' to a car salesperson at an auto dealership. Unfortuntely, most investors will never discover this muted warning.

Screen Shot 2016-12-26 at 10.06.11 AM.png

click on image to enlarge or zoom in ... -ascd-bl...

Alberta Finance Ministers who act in charge of the Alberta Securities Commission have done the "shoot, shut up and shovel" act, to bury any political scandal about this facade public protective regulator. I have experienced this no matter the political leanings or colours. Having contacted ministers from Shirley McLellan to NDP's Joe Ceci, and not one of the nine Alberta Finance Ministers over the last decade have moved to stop the robbery of investors. Nor in any of the other 12 Canadian provinces and territories... Political self preservation?
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Re: Broker/Advisor Disguise and Deception

Postby admin » Mon Dec 12, 2016 11:19 am

‘Adviser’ distinction raises alarm

jpg Lethbridge Herald ADVISOR DISTINCTION Dec 12 2016.jpg



If unqualified, unlicensed surgeons were allowed to operate on patients, Canadians would angrily call for an investigation. If unqualified people calling themselves lawyers were allowed to take cases to court, the response would likely be the same.
But a new report from the Small Investor Protection Association says 96 per cent of Canada’s “financial advisors” are evading provisions of their province’s securities legislation. They’re not registered as financial “advisers” offering impartial advice in their clients’ best interest.

With nearly 122,000 Canadian men and women registered to sell securities, the consumers’ organization says just 4,076 were legally registered (by September) as an “advising representative” or an “adviser.” That “e” is the legal distinction.
All the rest are simply sales “advisors,” the report says. They’re paid to sell the financial products their employer prefers.

“Seven out of 10 Canadians believe they are working with a financial expert with a legal obligation to look out for their best interests,” it points out.
But many are wrong, and the organization warns it can cost some Canadians half their life savings.
Unlike licensed doctors and lawyers, the association maintains, these sales agents have no fiduciary duty to act in the best interests of their clients.
“They can hide best advice, and the best products, from customers,” the report asserts.

“They can profit from the greater rewards of selling you substandard or higher-fee investments because they are salespersons, not professional advice givers with the agency duty and legal obligation to look out for your best interests.”
Lethbridge resident Larry Elford, who retired from the investment industry so he could warn the public about its practices, says no Lethbridge-area investment agents are registered as “advisers.”

“I have checked and there are currently none in Lethbridge area who possess the registration required to call themselves an ‘Adviser,’” he says.
That simple spelling variation, he says, allows them to remain outside the jurisdiction of Alberta’s securities legislation.
“But that is skirting the law (Section 100 on ‘Misrepresentation’ in the Alberta Securities Act).”
What’s worse, he suggests, neither the province’s securities officials nor the provincial government seem interested in increasing consumer protection for Albertans saving for their retirement.
“The Alberta Securities Commission is on record of ignoring this violation of Alberta law,” Elford says — “in favour of paycheques as high as $700,000 to those at the top of this regulatory agency.”

And neither the New Democrats nor the Progressive Conservatives saw the need for change, he adds.
“I have spoken to Alberta finance ministers as far back as Shirley McClellan, right up to Joe Ceci of today’s government,” he says.
“Each one has simply taken the stance of not wanting the public to be made aware of these violations of law, as well as violations of Albertan’s financial security.”
Elford says that’s how the City of Lethbridge ended up buying $30 million worth of “toxic investment products.”
That ongoing confusion over the role of investment sales personnel, he says, “thrives every day much to the detriment of millions of working and saving Albertans.”

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Re: Broker/Advisor Disguise and Deception

Postby admin » Fri Dec 09, 2016 7:36 pm

Is your Advisoir’ licensed for Wealth Creation, or Wealth Extraction?

The difference can easily cut your retirement by half.


Click on image to enlarge and to zoom in.

After working in and around the investment industry, I think the most interesting secret I may have observed, which is still in active hiding today (2016) is that there are actually two drastically different types of investment industry “adviser”.

At this time, the investment and regulatory industry is not telling consumers/investors of the different standards.


They are keeping this information from consumers, and dealers profit from what I am calling ‘regulatory arbitrage’. In English that means if you can slip a commission-investment-salesperson under the radar, by mis-spelling the lawful title used in the Act, you can evidently get away with a bit of a bait and switch. Professional codes of ethics, industry rules and Securities Act laws can be ignored as easily as breathing.

Consumers are not told of the difference, nor of the fact that laws and rules that keep investors fro harm are routinely ignored for profit. Easily half of Canadians future retirement money can thus be siphoned off to investment dealers and advisors, acting outside rules and laws. No police will respond to such systemic violations of you. No amount of prosecutors would raise an eyebrow.

The legal type of “advice giver” is spelled “Adviser” in law, and it is found in the Securities Act in your province.

The non-legal, non-regulated type is usually spelled “Advisor”, although there can be up to 38 other non-lawful “titles” that some salespersons will use, all to avoid having to refer to their true license and registration category, which is a commission-sales category, not an advice category.

2 trump fake invest barrons.png

Most remarkably, top securities regulators in Canada tell us (but not consumers:) that these two words do not mean the same thing. The secret is that while dictionaries and newspapers use the words interchangeably, and most investors assume they mean the same thing, the truth is that if you have a financial “advisor”, you definitely do not have a lawful financial “Adviser” with the duty of ‘do no harm’ to the investor. The industry, however is spending untold millions to cause you to believe that you do….just not to deliver.

Most consumers know full well the difference between shopping at a quality big box store, as opposed to shopping at the ‘Lucky Dollar’.
Investments are intangible, so investment dealers can get away with telling you their products (or their ‘advisors’) are top quality, and the only proof you have is in the truth of their word….and faith in our protective laws. Neither of those can be counted on to apply to systemic ’tricks' of the investment and regulatory industry.

The underlying mechanics of the issue is that one (Adviser) requires a fiduciary duty (somewhat similar to a medical oath to not harm the patient) while the other (Advisor) is not found in law, so is “governed” if you will, by self regulation, and industry ‘self’ enforcement, which is to say, not at all. The ‘self’ titled ‘Advisor’ can sell you anything which their dealer determines as “suitable”, even if it is the highest cost, highest commission, lowest performing investment. They do not tell you this, and the regulators blindly see no public protective issues. Systemic seems to mean ‘invisible’ to regulators.

[url]A suitability standard would be akin the to standard of products found in the Lucky Dollar Store, and it simply means that they feel the the product is “good enough” to sell.[/url]

In the end, 330 million Americans and Canadians are unaware of the two spellings, thanks completely due to Securities Commissions who have far more powerful incentives to protect the industry, and weak incentives to protect the public. Investors are thus “set up” to believe what they are told, and not told what they should believe.

The image that comes to mind is of the tobacco industry of the 1960’s, which basically lied it’s way through the 20th Century. Today that predatory role is being played by the investment industry.


The purpose of this article is to attempt to lend some fairness and balance to the investor, so they can be better informed of whether they are investing in world class products and advice, or investing their life savings in Dollar Box Store products.

If you feel that this issue is important to the socio-economic security of Canada, or to the U.S., please ensure your concern is addressed/corrected by your elected representatives, or vote in someone who will ensure fairness, honestly and good faith.

The 42nd Ontario general election is scheduled to be held on or before June 7, 2018.

The 30th general election in Alberta will take place on or before May 31, 2019
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Re: Broker/Advisor Disguise and Deception

Postby admin » Fri Oct 14, 2016 3:40 pm

Regulatory blindness allows the following tricks to be played upon Canadian Investors:
(these concepts could be used to potentially take financial advantage of millions of Canadians)

Screen Shot 2012-11-29 at 11.26.36 AM.png

Trick #1 is to advertise as if a trained and regulated professional:
Screen Shot 2016-10-14 at 4.39.11 PM.png

Trick #2 is to hide ones true license, thus concealing marketing incentives and/or the true "duty of care” owed to the investor. The result of this is the investor may be sold a different service than what they are led to believe by the Investment Dealer. See: Ethical Standards for Stockbrokers: Fiduciary or Suitability? ... id=1686756

Screen Shot 2016-10-14 at 4.36.15 PM.png

At the site “" one is quickly directed to a license search page where any broker in Canada can be checked to see if and HOW they are registered. ... px?ID=1325

Trick #3 is for the regulators (with Provincial government authority) to allow Securities Laws on misrepresentation to be ignored by thousands of salespersons, which can allow them to dupe the public into placing their trust in non-licensed “titles”. The result of this is
the investor is again being sold a different service than what they are led to believe by the Investment Dealer.

Screen Shot 2016-10-14 at 4.46.53 PM.png

Trick #4 is to advertise that the firm promises to place the interests of the investor first and foremost:
We value the objectivity and impartiality of being an independent firm where the best interests of our clients come first.

Trick #5 is to then quietly lobby, in the background, to regulators to NOT place a client-best-interest standard into law:

I would contend that the majority view of the provincial commissions should prevail and the best interests standard not be implemented. ... ckettw.pdf

This is an example of a system in which the regulators “pretend” to regulate and protect consumers, whilst sleepwalking through the process. Meanwhile hungry Investment Dealers and their Dealing Rep’s (Salespersons) misinform the public in any manner desired. It resembles a lawless financial system for Canada. See what one regulator, the Albert Securities Commission says (quietly so no one will hear it...:) about what to expect from a Dealing Representative.

it’s (the duty of care of a Dealing Rep) not unlike purchasing a car from a dealership. ... aspx?ID=63

From the CSA website under Mission:
To give Canada a securities regulatory system that protects investors from unfair, improper or fraudulent practices

Altus Securities, Tricks, blindness, lawless, National Bank
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Re: Broker/Advisor Disguise and Deception

Postby admin » Sat Oct 08, 2016 8:45 am

Kenmar Associates

A Self Protection Guide for Senior Investors October, 2016

images.jpeg (5.46 KiB) Viewed 30482 times

October is investor education month in Canada. All the securities Commissions will remind investors to check the registration status of their “advisor” . You should do that but be forewarned the process isn't easy.
Be aware that the title “advisor” has no legal meaning – it won't match any of the registration categories.
If you see they are under “ strict supervision” , it's time to change advisors.

Our concern is with those “ advisors” that are registered and how senior investors can be exploited . Yes ,they are required to follow IIROC and MFDA rules but
the rules aren't as tight as you'd think and they aren't enforced to the necessary degree by the industry self-regulators. As Vanguard founder John Bogle has remarked “ The scandal isn't what's illegal, it's what's legal”.

Advisors are required to sell you suitable investments but they are NOT required to act in your best interests.

Senior financial abuse and exploitation continues to be one of the most prevalent and “lucrative” enterprises in Canada. Approximately 30-35 % of all complaints received by regulators involve seniors. I suspect the elderly statistics are distorted as it’s my experience that the elderly are usually reluctant to formally complain for many reasons .

Seniors often avoid publicity or litigation due to the embarrassment of having been bilked. They may unduly blame themselves for losses, are reluctant or unable to formulate a complaint or unaware that something is amiss. A 2007 Canadian Securities Administrators Investor Study: Understanding the Social Impact of Investment Fraud, estimates that over one million adult Canadians have been the victim of investment fraud. The study shows it is a common occurrence in the lives of many Canadians, with almost one-in-20 having been victimized.

Regulated “advisors” also are quite capable of fraud but the real abuse is more subtle- unsuitable investments, undue leveraging , high cost products , account churning and lately, reverse churning and pension commutation.

1. Check registration: Engage with registered dealers and advisors with good reputations.

2. Don’t fall for investments that promise “guaranteed” or exceptionally high returns: If an investment seems too good to be true, Run.

3. Avoid investments that are advertised as “risk free”: All investments have risk. As a general rule, the greater the potential return, the greater your risk of losing money.

4. Don’t be rushed into an investment by high pressure sales tactics .Always take the time to evaluate and understand an investment before purchase. Always be leery of “once in a lifetime” opportunities, or investments that are only available “for a limited time.”

5. Be wary of inflated titles:
A few advisors may use inflated titles to market themselves such as Vice President
and the like. Too often, these are meaningless. Don’t be intimidated by the titles.

6. Be wary of professional designations: Some advisors may use professional designations to market themselves as retirement or senior specialists. While real professional designations require rigorous study or extensive education or experience, some may be relatively easy to attain, and may even be available to individuals with no experience.

7. Avoid “Free lunch” financial seminars for seniors: These seminars may be carefully scripted sales presentations designed to prey upon seniors’ fears. Some of these seminars may pitch investments that may be unsuitable.

8. Make sure that you clearly communicate your investment objectives to your advisor: Don’t let him/her steer you into investments that are not in line with your investment objectives or time horizon.

9. Never sign a blank or incomplete document: Always take the time to review documents you are asked to sign, and ensure the document is filled out completely and signed/dated.

10. Take great care in filing out the NAAF/KYC form .Anything you declare can and will be used against you in the event of a complaint. Don't exaggerate investment experience or risk tolerance. 11. Never give cash to an advisor: When making an investment, use a method of payment that can easily be tracked. Make payments only to the registered dealer, NEVER to an individual.

12. Avoid any personal financial dealings with your advisor: You are not a bank so don’t start lending out money. Avoid assigning POA or executorship to an advisor .

13 Get a second opinion: If you have questions about an investment and the advisor fails to fully or satisfactorily explain things, consult a different financial professional.

14. Ask questions: Some advisors may use language or jargon with which you may be unfamiliar. If you don’t understand something, ask for a clear explanation.

15. Contact your provincial securities regulator: Every province has a Commission/agency devoted to protecting people financial abuse and fraud. Contact your provincial securities regulator if you suspect you’ve been treated badly or targeted as part of a financial scam.
And above all , read your account statements and transaction slips. If something appears amiss, act quickly to get it resolved. Do NOT let problems accumulate.


The following are the most basic questions that seniors, and investors in general, should ask when facing the decision to make an investment:

· Do you have a fiduciary duty to me? If yes, get it in writing on Company letterhead.
A verbal promise is not worth the paper...that it is not written on.

· How are you compensated?
· Can you explain the investment to me without using industry terms or jargon? · Do you use Investment Policy Statements?
· What risks are associated with the investment/program?
· What are the investment cost in terms of commissions and fees?
· Are there additional or ongoing fees?
· Are there early redemption charges associated with this investment?
· What are the pros and cons of this product re taxation?
· Why is this investment suitable for me? What are the alternatives?
· What type of reports will I receive and how frequently?
· How easy is it to sell or convert the investment to cash if I need money quickly? · What happens if I have a complaint?
If the salesperson can’t or won’t answer your questions in writing and to your satisfaction, the investment may not be right for you. Ask questions and stay informed about your investments. Seek help if you believe you are being targeted or have been a victim of financial fraud or abuse.
Some light reading to protect your assets:

Pursuit of a Financial Advisor Field Guide – v13 A MUST read for retail investors.

Understand Investment Jargon The Steadyhand Investment Dictionary

The Responsible Investor

Why Your Financial Adviser Should Be a Fiduciary
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Re: Broker/Advisor Disguise and Deception

Postby admin » Fri Oct 07, 2016 1:45 pm



A Small Investor Protection Association (SIPA) Report

Securities Acts define an “Adviser” as having responsibility to look after investors’ best interests.

Regulators say “Advisor” is an unregulated business title that can be used by anyone.

Sales persons are not legally required to look after Investors’ best interests. They use the title “Financial Advisor” to gain trust.

By the SIPA Advisory Committee

October 2016
Page One
Executive Summary:

Securities Regulators selectively ignore portions of Provincial Securities Acts, letting Investment Dealers deceive millions of Canadian investors in many ways. We will be issuing a series of reports intended to shine a light onto this harm being done to Canadians, by many of our most trusted institutions as well as government authorized regulatory bodies.

In this report, we examine how over 100,000 financial professionals in Canada take advantage and skirt laws against misrepresentation. This allows investment sellers a clear “get-away” from the laws against deception of the public.

In 2012 one of the biggest news story in Canada was about a selective meat inspection process in Alberta, and the resulting harm to Canadians. It turns out that tainted meat products were being carefully inspected so as to not enter the export markets, but the tainted product was allowed to be sold to Canadians. This called into question both the quality of the product itself, and the government inspection process. This report looks at items which are hidden from investors view, and can similarly do harm to Canadians.

With the knowledge of 13 Provincial Securities Commissions who are responsible for protecting the public interest, these harms appear similarly negligent, to the failures of the meat inspection and regulation process. What if Canadians were consuming tainted investment advice, like some regulators allowed E-coli tainted meat into the system? This report demonstrates that the analogy is a valid one.

Screen Shot 2016-10-08 at 2.51.38 PM.png

The “Advisor” Bait and Switch

There are 121,932 total registrants in Canada as of Sept 16, 2016 in the investment industry. 4,076 persons or 3% of that total are legally registered in the category of Adviser or Advising Representative.

Only four thousand and seventy six (4076) persons are registered in the category where a true fiduciary professional responsibility is legally required to be delivered to you as the investor.

“A fiduciary is an individual in whom another has placed the utmost trust and confidence in to manage and protect property or money. This person has an obligation to act for another's benefit. The duties of a fiduciary include loyalty and reasonable care of the assets within custody. All of the fiduciary's actions are performed for the advantage of the beneficiary.”

Wait a minute, what about the other 117,856, you ask?

Wait a minute, what about the other 117,856, you ask? They fall under the most common registration category and are called Dealing Representatives. What exactly does Dealing Representative mean? According to the Canadian Securities Administrators a “Dealing Representative is a sales person – what they can sell depends on the firm they work for and their registration.”

Page Two

In 1 minute 30 seconds this video shows how to search this for yourself at ... -investors

That's right, the vast majority of investment registrants are just salespersons!

That's right, the vast majority of investment registrants are just salespersons! These people are not legally required to place the interests of the investor ahead of those of their dealer. This is the bait and switch and the root cause of a great deal of harm being played out upon nearly every Canadian investor. The Dealing Representative legally acts as an agent of the dealer, and NOT firstly an agent of the investor. Client relationship rules currently allow this to be hidden from your view, and the investor is expected to be responsible for learning this information themselves. Many unfortunately learn the hard way.

Screen Shot 2012-11-29 at 11.26.36 AM.png

On September 17th 2015 the Ontario Securities Commission released a report called “Mystery Shopping for Investment Advice” which uncovered a number of disturbing facts. One being that the shoppers encountered no fewer than 48 different business titles during the shops! Investors need better protection than a standard that permits registrants to choose their own business titles based on meeting minimal standards of accuracy and misrepresentation. ... report.htm

Dealing with a salesperson when you think you have a professional “adviser”, is thus the epitome of a deceptive relationship

Dealing with a salesperson when you think you have a professional “adviser”, is thus the epitome of a Buyer Beware relationship, despite new Client Relationship (CRM2) rules effected in 2016. Seven out of ten Canadians believe they are working with a financial expert with a legal obligation to look out for their best interests.

How could so many Canadians be so misled? Sadly because this deception and word trickery is not what the investment industry promises the investor. They proclaim nearly everything but the need for their customers to be warned they are entering into a “buyer beware” relationship. See our previous report on deceptive advertising and you will understand why. ... 150505.pdf

It is estimated that hundreds of billions of dollars are lost by Canadians over the past few decades during which this salesperson/broker/advisor/adviser ruse has taken place. (1988 to 2016)

This 1 min 40 second tutorial walks you through the CSA web site to give you the specific license or registration category your so called advisor holds, not what they purport to be with non-regulated marketing titles.

You should also be aware that it is not uncommon for industry representatives to have more than one designation. For example the representative may be registered as
A “Portfolio Manager” with responsibility for managing accounts or operating a discretionary and has a fiduciary responsibility
An “Advising Representative” qualified to give investment advice and has a fiduciary responsibility
A “Dealing Representative” qualified to sell financial products but without fiduciary responsibility or responsibility to look after clients’ best interests.

Page Three

This multiple registration enables your representative to “change hats” and work with you as a sales person without responsibility to look after your best interests even though he may be qualified as a Portfolio Manager or an Advising Representative. This is just one of the “dirty tricks” played by the industry to deceive investors.

Practically all professional investors have a fiduciary adviser, while 99% of retail investors, ordinary Canadians like you and I, are “switched” to commission salespersons wearing a false title and disguise. It is a simple two-tier investing system with legal protections for the professionals, and “slim-to-none” protections for the majority of Canadians. A fiduciary “Adviser” is legally obligated to place his or her skills to work in managing your money as best as can be professionally done. A non-fiduciary “Dealing Representative” (salesperson) can sell you anything that they deem “suitable”, even if it is second, third, or fifth down the list of quality or efficiency. The “suitability obligation” is the equivalent of a used car dealers obligation. See this investor warning from the ASC on this topic. What’s in a name? Does the title of your investment professional matter? ... aspx?ID=63

my clients are really counter-parties that I can make money off

Here is a link to a short video where Ex TD Bank CEO Ed Clark states that the culture of greed in banks allows for a business model that in essence says “my clients are really counter-parties that I can make money off “

“Suitable" is like saying "this wine is drinkable”, or “all our food is edible”. It is the lowest industry standard, and would be acceptable only to someone who would accept investments from a Bargain Outlet Store...

“Suitable" is like saying this water is “drinkable”, our food is “edible”. How many of you would patronize a restaurant whose written obligation to the public is that “our food is edible”, our steak is “chewable", “suitable for consumption", or "our wine is drinkable”?! That is unfortunately the benchmark standard required of the investment Dealing Representative.
Most salespersons (Dealing Representatives) in Canada, prefer to utilize the non registered title of “advisor”, to deceive the public into belief that they are legally licensed in the professional category of “Adviser”, or Advising Representative. “Advisor”, as we shall soon show you, has no meaning in securities law, and thus no meaning to the securities regulators in Canada.

The following quote comes directly from Mr. Chris Besko, who is the lead counsel for the Canadian Securities Administrators. The CSA is the umbrella organization that oversees the 13 Provincial and Territorial Securities Commissions. He states:
“Financial Advisor, as you noted, is a common title which many persons use, whether they are registered under securities legislation or not. ….” “The use of this title is not generally prohibited, and may be used by anyone…” “We do not prescribe specific titles to be used by those persons who are either dealing or advising in securities…”

This hiding behind a non-regulated title, with no meaning in law, means that Investment Dealers and salespersons are also hiding the fact that they can act as a counter-party to your financial interests, just like any commission salesperson might do.
These ignored protections have the potential to do more harm to the retirement security of Canadians than the dollar-value-harm of all other crimes in Canada, even when combined together. This will be revealed in some detail in an upcoming report in this series.

Page Four

They can hide best advice, and best products, from customers. They can profit from the greater rewards of selling you substandard or higher fee investments because they are salespersons, not professional advice givers with the agency duty and legal obligation to look out for your best interests.

This “ruse” does not meet the test of “fair, honest and good faith dealing”, as promised and required, by the Canadian investment industry.

This “ruse” does not meet the test of “fair, honest and good faith dealing”, as promised and required, by the Canadian investment industry. Imagine if non-licensed “doctors”, or non-legal “lawyers” were found able to fake credentials, and hide a false duty of care to the public behind implied duties which did not exist? This deception has the ability to cut your retirement in half! A future report in this series will further explore how many methods/tricks can follow this root deception, and how these methods/tricks can easily cut the retirements of millions of Canadians by half or more, putting the other half (or more) into the pockets of clever investment dealers.

Call your provincial MLA or Federal member of Parliament and ask them how securities regulators can allow over 30 million Canadians to be deceived regarding their financial security. Ask them to create sole-purpose, investor protection organizations, outside of the influence of the Securities Commissions, to protect Canadians. Millions of dollars are being spent by industry lawyers, regulators and lobbyists speaking to your government to protect these deceptions.

Provinces who wish to protect the public from unfair dealing, should establish Investor Protection Agencies, with government staffing, government funding, and police-like powers, including a mandate to involve the criminal code, which is now often ignored in favour of “self” regulation. These agencies could direct their energies to sole protection of consumers, rather than the “dual-master/dual-mandate” style of regulation that is failing us.

An Investor Protection body should not contain committees or boards who are filled with industry spokespersons, but should be over-weighted towards persons who can demonstrate and uphold a strong public interest protective mandate. Any board protecting the financial health of a nation, or its citizens must be designed to be robust enough to resist the pull of billion dollar corporations.

“Where the fundamental nature of the relationship is one in which customer depends on the practitioner to craft solutions for the customer’s financial problems, the ethical standard should be a fiduciary one that the advice is in the best interest of the customer. To do otherwise —
to give biased advice with the aura of advice in the customer’s best interest — is fraud.”

James J. Angel, Ph.D., CFA and Douglas McCabe Ph.D., McDonough School of Business, Georgetown University, “Ethical Standards for Stockbrokers: Fiduciary or Suitability?” Sept. 30, 2010 ... id=1686756 

Page Five


Categories of Registration and Their Meaning

"Did you know? Not all financial advisers and firms are the same.

There are lots of different titles and designations that a financial professional may have. But it is their category of registration that lets you know the range, breadth and depth of advice and products they can offer."

There are 121,932 registered persons in Canada as “Dealing Representative” (CSA detailed search page as of September 16, 2016)

There are 4,076 registered as Advising Representatives in Canada

17 are registered as “Adviser”

There is NO CATEGORY for the title of “Advisor” (spelled using “or” at the end), and yet up to 100,000 commission salespersons in Canada use this title to market themselves, contrary to Securities Act Laws against misrepresentation.

Source: ... &history=1

What exactly do these categories mean?

Dealing Representative: A sales person – what they can sell depends on the firm they work for and their registration.

Advising Representative: A person who provides advice on securities to clients. They can manage your investment portfolio according to your instructions. They can also make decisions and trade securities on your behalf. ... ies_en.pdf

Page Six

When you hand over your savings are you looking for a product pusher? A salesperson? Or are you expecting and looking for unbiased investment advice that is in your best interests? They might call themselves any number of different titles but what category are they actually registered in? If they are registered as a Dealing Representative then they are a salesperson.

If you look at the numbers across Canada the odds that your financial advisor is a Salesman are very high.


There are 2,335 records found for Advising Representatives
There are 27,057 records found for Salespersons (Dealing Representatives)

British Columbia
There are 2,368 records found for Advising Representatives
There are 32,416 records found for Salespersons (Dealing Representatives)

There are 1,648 records found for Advising Representatives
There are 11,288 records found for Salespersons (Dealing Representatives)

New Brunswick
There are 1,268 records found for Advising Representatives
There are 8,839 records found for Salespersons (Dealing Representatives)

Newfoundland and Labrador
There are 1,057 records found for Advising Representatives
There are 6,414 records found for Salespersons (Dealing Representatives)

Northwest Territories
There are 518 records found for Advising Representatives
There are 3,877 records found for Salespersons (Dealing Representatives)

Nova Scotia
There are 1,444 records found for Advising Representatives
There are 10,609 records found for Salespersons (Dealing Representatives)

Page Seven


There are 450 records found for Advising Representatives
There are 3,273 records found for Salespersons (Dealing Representatives)

There are 3,589 records found for Advising Representatives
There are 63,888 records found for Salespersons (Dealing Representatives)

Prince Edward Island
There are 877 records found for Advising Representatives
There are 5,369 records found for Salespersons (Dealing Representatives)

There are 2,097 records found for Advising Representatives
There are 35,760 records found for Salespersons (Dealing Representatives)

There are 1482 records found for Advising Representatives
There are 11,906 records found for Salespersons (Dealing Representatives)

There are 542 records found for Advising Representatives
There are 3,943 records found for Salespersons (Dealing Representatives)

Registration information was last refreshed on 2016-10-03 18:26 PST.

We feel that this is a deception of the investing public. Can your trust your life’s savings to institutions who are hiding the true license and duty from you?

It seems as if that would be like flying in an aircraft where the pilot did not hold a pilot’s license……

Screen Shot 2016-10-08 at 2.52.16 PM.png
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Re: Broker/Advisor Disguise and Deception

Postby admin » Mon Sep 12, 2016 10:31 am

The Broker/Advisor Bait and Switch goes like this.....
."Trust me, I am a professional advisor"......(then a few years later)......"Oh, I am so sorry your trust was misplaced, as we are only brokers and order-takers in misunderstood this, and thus you are the author of your own misfortune....."

Screen Shot 2013-03-04 at 10.17.37 AM.png

P18 -

“In 1991, one of the last rejections of the “know your client” and suitability requirements appeared in the common law. At trial, in Reed v. McDermid St. Lawrence Ltd. 33 (“Reed”) the judge held: (i) that an IA has a “duty to warn” a client of exceptional risks, (ii) that the “know your client” rule was the “basic ethic of the [IDA]”, and (iii) that the “know your client” rule requires an IA to be “genuinely persuaded that the customer knows what he is doing.” However, the British Columbia Court of Appeal reversed this decision and held that, absent the existence of a fiduciary relationship, the sole purpose of the “know your client” rule is to serve as a credit check to protect the investment dealer. The Court of Appeal stated: It is not doubted that brokerage firms need to know a good deal about their clients for their own purposes, especially for the purpose of avoiding purchasing stock for a client who cannot pay for it. That is a far cry from saying that a broker owes a duty to the client to put his nose into his client’s business before taking instructions from the client for the purpose of protecting the client from inadvisable transactions initiated by the client.”

Larry asks the following of the other professionals who give input here:
Would it be at all fair, if I held the impression that what the courts miss in this Court of appeal ruling, is that there are virtually NO persons or entities out there portraying themselves honestly as “brokers”?

They all seem to be elevating themselves to the status of “advisor”, albeit without the necessary license and duty of care…..and they point that out clearly when their misdirection gets them into trouble. Pit they do not take care enough to point that out when luring clients into a special trust relationship….


youtube video outlines the problem in more detail Investment Advisor Bait and Switch, GET YOUR MONEY BACK!

HBO's John Oliver video does an even better job, very clear, very funny.


Six minutes later, and one of the top investment minds in Toronto, Ontario, sends me this reply:

From the same source document:

In the same year “Rhoads v. Prudential-Bache Securities Ltd” (trial judgement) found there to be a fiduciary relationship and this is the ruling on appeal:

: What, then, is the duty of a stockbroker who chooses to offer financial, investment and taxation advice, in addition to the services of a broker or “order-taker”? A stockbroker who merely makes sales and purchases on the instructions of clients may well have no responsibility for the wisdom of the transactions involved. The broker may, if asked, agree to give opinions on purchases or sales, and may make it apparent to the client, if not already well understood between them, that these constitute no more than personal opinions, and are not in the nature of considered investment advice. Where, however, as here, the firm and its employees seek to enhance their business by offering guidance to would-be investors – on “growing and managing retirement wealth” and “keeping investments safe”, and to serve in “ways that no one else can” through the advice of “two financial advisors with 22 years of combined investment and taxation experience” – they must expect that their advice may be relied on as that of skilled, independent professional advisors. Stockbrokers who carry on business in this way accept responsibilities beyond those involved in bringing together buyers and sellers. They undertake the duty of providing careful, competent, considered professional advice of a sort in which clients, especially those who have no experience of their own to guide them, may well place their complete reliance… In such circumstances, a financial advisor must be taken to assume duties similar to those of any other professional advisor – doctor, accountant, engineer, lawyer – in the sense of being obliged to take reasonable steps to ensure that customers or clients are aware of the available options, and of the main potential benefits and risks associated with them. … It seems to me that the case in ordinary tort law professional negligence is clearly established by the trial judge’s findings of fact, and that there is no need to embark on a consideration of any distinctions which might arise, so far as these appellants are concerned, with respect to the claims made in contract and breach of fiduciary duty

[color=#FF0000]What then happened was “Varcoe v. Sterling36 (“Varcoe”)” “the courts found a suitability requirement exists even in situations where a fiduciary relationship does not exist”.

So part of me wonders whether prior to Varcoe V Sterling whether there was a developing fiduciary standard status being developed for advisors via common law. Varcoe v Sterling scuppered this move by allowing common law to find a lower standard. But the dynamics are clear: the trend is towards increasing advisor responsibility and that where we are at is a point on the curve not a point on a map: the one is moving towards something, the other is fixed.

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Re: Broker/Advisor Disguise and Deception

Postby admin » Wed Jun 01, 2016 9:58 am

Guest Post by Ken Kivenko, Kenmar Associates, Investor Education and Protection

June 1, 2016

Misleading “ Advisor “ Titles


June is seniors month in Canada .
Regulators will warn people to check registration and to look out for fraudsters. The sad fact is Canadians lose more money from registered “ advisors” through a number of devious tricks. One of them is to use titles that mislead.

Canadian financial consumers of financial services and products are confused about their advisors' obligations to them. The industry is rife with an alphabet soup of titles that have no legal standing, designations that split according to industry sectors, and standards of proficiency that range widely. Commonly used business titles include advisor, financial advisor, investment advisor, financial planner, wealth advisor, and investment associate.
The actual registration is salesperson or dealing representative.

Many of these business titles do not, on their own provide a meaningful description of the type of services and/or investment products that a licensed representative can offer to a client. The requirements to earn and maintain these financial designations vary greatly. Some professional designations take years of work or classroom study, while others can be obtained after a weekend seminar or through online self-study. Some titles are nothing more than marketing tools .

Simply put, the criteria to obtain and maintain these various financial designations vary widely. Very few firms provide clients with any explanation of what these financial designations mean in practice.
Seniors are a special target. Some financial professionals use designations that imply that they are experts at helping seniors with financial issues. Many seniors, however, don't understand the sets of initials that may follow the names of these financial professionals or the meaning of the titles - such as "senior specialist" or "retirement advisor" - they use to market themselves.

The education, experience, and other requirements for receiving and maintaining a "senior" designation vary greatly. In some cases, a financial professional may need to study and pass several rigorous exams - after working in a designated field for several years - to receive a particular designation. In other cases, it may be relatively easy in terms of time and effort to receive a "senior" designation, even for an individual with no relevant experience.

Here’s some Videos that illustrate the use of misleading titles: ... JBa_l0w7AQ Cary List FPSC gets to the point in about 35 seconds in this video CBC news also gets to the point in less than the first minute of this video

We encourage you to thoroughly evaluate the background of anyone with whom you intend to do business - before you hand over your hard-earned cash. You also should ask questions - that's the best advice we can give you about how to invest wisely. We see too far many investors who might have avoided trouble and losses if they had asked basic questions from the start.

More of Ken Kivenko's work on investor protection and investment system best practices can be found here:

Thanks to Larry Elford for his assistance
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