The Trinidad and Tobago Securities and Exchange Commission (TTSEC) often receives questions about investment advisers—who they are and how to go about choosing one. This document answers some of the typical questions we receive from investors.
Q: What is an investment adviser?
A: An investment adviser is an individual that is in the business of and receives compensation for, giving advice to clients on investing in securities such as stocks, bonds or mutual funds.
According to the Securities Act, 2012 – “Investment adviser means a person engaging in, or holding himself out as engaging in, the business of providing investment advice, and includes a person that provides investment advice to a manager of a collective investment scheme”
Q: What is the difference between an investment adviser and a financial planner?
A: Most financial planners are investment advisers, but not all investment advisers are financial planners. Some financial planners assess every aspect of your financial life—including saving, investments, insurance, taxes, retirement, and even real estate planning. They even help you develop a detailed financial plan for meeting your financial goals.
Before you hire any financial professional, you should know:
Q: What questions should you ask when choosing an investment adviser or financial planner?
A: Here are some of the questions you should always ask when hiring any financial professional:
Be sure to meet potential advisers “face to face”.
Q: How do investment advisers get paid?
A: Before you hire any financial professional—whether it’s a stockbroker, a financial planner, or an investment adviser—you should always make sure you understand how that person gets paid. Investment advisers are generally paid in any of the following ways:
Get several opinions before making your decision. Also ask if the fee is negotiable. Remember it is your money and you need to know where it is going.
Q: Do investment advisers have to register with the TTSEC?
A: According to the Securities (General) By-Laws, 2015 Section 19 (2), not all investment advisers are registered with the TTSEC. Exceptions include:
Q: What should you do if the financial professional claims that he or she is “certified”?
A: If the professional you’re considering claims to be certified, you should ask to see their certifications and also refer to the TTSEC’s website at www.ttsec.org.tt to see if they are listed as an investment adviser, or have other relevant credentials, such as a certified accountant, or an Attorney-at-law.
Registered investment advisers with the TTSEC must meet the ‘fit and proper’ requirements outlined in the Securities (General) By-Laws, 2015. According to the By-Laws ‘fit and proper’ requirements refer, but are not limited, to:
Do your own research as investment advisers and financial planners may have different educational and professional backgrounds.
This Q&A is for the benefit of investors. There are many types of individuals who can help you develop a personal financial plan and manage your hard–earned money. The most important thing is that you know your financial goals, have a plan in place, and verify that the professional is a registered financial or investment adviser
The Trinidad and Tobago Securities and Exchange Commission is not an investment adviser nor is it a brokerage house. This article is intended solely to provide you with the information you need to help you make sound investment decisions and to ensure that you are familiar with and understand your rights and responsibilities as a consumer of financial services. To lodge a complaint, ensure that you complete the prescribed complaint form located on the TTSEC website www.ttsec.org.tt.
Before investing, educate and empower yourself!
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