Do a Background Check on your Financial Advisor

It is a good idea to check out your adviser or research an investment before you invest.

The more information you have, the better. There are many free and easy-to-use online sources to help you find out quickly if a person or company is registered or if they have any disciplinary record.

1. Check your adviser’s registration

Check your adviser’s registration using the Canadian Securities Administrators’ National Registration Search. You can search for a company or individual by name to find current and historical registration information.

Remember Nova Scotia securities laws require anyone trading securities or in the business of advising clients on securities to be registered with the securities commission, unless a registration exemption applies.

If your adviser is not registered in the province, contact the securities commission to see if he or she is legally allowed to sell investments under an exemption.

Read more about the various exemptions here.

2. Check for disciplinary action

Investment Industry Regulatory Organization of Canada (IIROC). Here, you can learn about IIROC members and the role of IIROC in securities regulation. The Member Firm/Registrant Information Servicelink on the home page includes an online Disciplinary Search feature for finding IIROC disciplinary actions, and an Information Request Form for obtaining registration status and past disciplinary information.
Mutual Fund Dealers Association of Canada (MFDA). Use the links on the left side of the MFDA Enforcement page to view enforcement cases that relate to MFDA members. The link to Completed Cases will take you to a list of cases in alphabetical order. Each case includes further links to published bulletins, news releases, notices, orders, decision, and reasons. You should also check Current Cases and the Hearing Schedule.
Canadian Securities Administrators National Cease Trade Order Database contains issuer (company) and non-issuer cease trade orders. Cease trade orders against a company usually indicate that the company has not met its filing obligations. The database includes all current outstanding cease trade orders issued by the regulatory authorities of Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland & Labrador, Nova Scotia, Ontario, and Québec.
3. Check the company’s history

Check that the company is incorporated or registered to do business in your province. Make sure that the people you are speaking with really represent the company, and find out where their head office is located.

The following directories are generally available at public libraries in Canada or online:

SEDAR: the official site that provides you with access to most public securities documents and information filed by public companies and investment funds with the Canadian Securities Administrators (CSA).
D&B Canada: Search by company name, verify the existence of a company, and view legal name and address information.
Yahoo! Finance: Find brief company profile information and links to news releases
Strategis’ Federal Corporations Data Online, from Industry Canada, allows you to search federal incorporation records using various criteria including name and region.
4. Check the news

You can find information about a company or individual in the news. The news can also tell you about court cases and be a source for hearing rumours that you should investigate further.

Most public libraries’ websites provide access to free quality news sources including:

Canadian Newsstand: Provides full text of BC and major Canadian daily newspapers, including the Vancouver Sun and Province, National Post, and Calgary Herald.
Canadian Periodical Index (CPI-Q): Provides full text of Canadian magazines, journals and news sources, including the Globe & Mail.
Canadian Business and Current Affairs (CBCA): Provides full text of Canadian magazines and journals in business, current events and other areas.
Searching news services

News search engines give better results than general search engines for news on companies and individuals. They include only news sites and are updated more frequently. Useful news search engines include:

AlltheWeb News
Altavista News
Google News
Yahoo! News