Last week we published a quick review of Registered Retirement Savings Plans, or RRSPs. As we said in that post it’s RRSP season for investors and advisers. So, investors can expect to see ads online, in print, or broadcast on TV or radio reminding them to contribute to their RRSP before the contribution deadline.
If these ads are being delivered by an adviser, they can’t simply say anything they want in the ads. For example, an adviser can’t produce an ad that says they will deliver better returns than you’re currently getting, or recommend you switch your entire portfolio to stocks or ETFs. This kind of advice may not be suitable and is not permitted in ads.
Most obligations for what an adviser can and cannot say in an ad involve their duty to act in good faith, their category of registration, and rules around holding out (which we talk about below).
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 make 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 ad in which they recommend the purchase of stocks or exempt market securities for example. You can check the registration status of the adviser using the national registration database.
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. If you hear or see an ad that you think it problematic, please refer it to the Commission.