Submitted by nsscadmin on
Last week we provided a quick rundown of RRSPs. As we said in that post, it’s RRSP season and investors can expect to see ads online, in print, and broadcast on radio and TV reminding them to contribute to their RRSP before the deadline.
When it comes to investment advertising from registrants there are a few red flags to watch out for. Most obligations around what a registrant can and can’t say in advertising revolve around their duty to act in good faith, their category of registration, and rules around holding out.
Duty to act in good faith:
Under their duty to act in good faith, a registrant cannot include things like a guaranteed rate of return and offer unsubstantiated claims. If you hear or see an advertisement that promises specific returns or advises you to sell one type of investment in favor of buying another, it is likely not allowed.
Category of registration:
A registrant cannot advise on securities that do not fall under their category of registration. If a registrant is registered as a mutual fund dealer, they cannot produce an advertisement in which they recommend the purchase of stocks or exempt market securities for example.
Rules around holding out:
A registrant cannot portray themselves as something they are not. For example, they cannot portray themselves as a financial planner if they do not have the certification and qualifications for that title. Another example is that they cannot portray themselves as a portfolio manager if they are not registered as one.
Investors should always scrutinize investment advertisements or marketing material and watch out for things such as unrealistic statements, generalized advice (without a personal suitability assessment), unsubstantiated claims, and guaranteed returns.