Bank v Independent Advisor: Who Do You Trust?

When it comes to investing, trust is crucial. You’re not inclined to give someone control of your life savings (or even an idea about your finances) if they haven’t proven themselves trustworthy. When you don’t know someone in the industry that you already trust, the natural inclination, of course, is to trust a financial advisor affiliated with a bank. After all, banks have a track record of providing safety and security to their customers. But doing so means you would be putting your trust in the bank, rather than the actual advisor you would be hiring.

Beyond a governing force, people tend to trust banks almost implicitly. After all, they seem like the most common place for managing and investing your finances. They also seem like the safest option. But, in reality, your finances are just as safe with an independent financial advisor.

You may be surprised to hear that security and safety are no different for non-bank financial advisors. You may also be surprised to learn that many of the top advisors are independent.

Just because a financial advisor is affiliated with a bank does not make them better equipped to provide advice, nor does it make your investments safer. Looking for the individual, their experience, and their credentials would go further in acquiring the best financial advisor to meet your needs.

There are regulations in place that govern how all registered, full-service investment advisors manage your finances. They are all regulated by the IIROC (Investment Industry Regulatory Organization of Canada). IIROC ensures that your investment advisor is properly licensed, regulated, and supervised. Holding your investments with a member firm also ensures that your investments are properly managed and insured by the CIPF (Canadian Investor Protection Fund). If you have an account with a member firm, and the firm becomes insolvent, CIPF works to ensure that any property being held for you by the firm at that time is given back to you, within certain limits.

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