What Do Investors Complain About the Most ?

What do investors complain about the most in Canada? According to the IIROC (Investment Industry Regulatory Organization of Canada),

“…unsuitable investments generate the most number of complaints…”,

(investors complaints to the IIROC). On October 31st, the IIROC published their Enforcement Report 2015 outlining the complaints they receive (as the industry watchdog) from customers (you complain here).  The report outlines a lot of data, and very specific cases where the IIROC has “prosecuted” their members.

What do investors complain about, ask the IIROCI received this report because I am on the IIROC mailing list. The list is where they publish their findings on investigations done on their members.

The top 5 complaints they received last year are:

  • Unsuitable Investments
  • Service Issues
  • Disputed Fees
  • Firm policies and procedures
  • Unauthorized trading

The IIROC points out that the percentage of complaints matches their prosecution statistics, where 50 % of prosecutions against their registered members had to do with suitability requirements. Seniors are the largest demographic that complains or makes inquiries with the IIROC.

The report is well worth reading, however, I am concerned that only 838 complaints have been received over the past two fiscal years. That numbers strikes me as being a little low, but remember this is an industry organization, investigating their members. There may be many more complaints out there, but the “culprits” may not be members of the IIROC.

The fact that Seniors (61-100 years old) accounted for 63% of the complaints seems to  point to that group as being the target group for unscrupulous activity. It is not surprising that seniors seem to be the largest victim group.  We need to protect our Senior Citizens from unscrupulous deals, and downright bad investing advice, is the one thing I take away from this report.

Complaints by Category

An interesting table of regulatory violations investigated by the IIROC by year.

Individual – Breakdown by Violation 2015 2014 2013 2012 2011
Due Diligence/Handling of client accounts/suitability 19 18 19 26 20
Inappropriate personal financial       dealings 6 5 7 10 9
Misappropriation 1 1 3 9 4
Misrepresentation 5 8 3 9 4
Discretionary  trading 9 5 5 6 5
Forgery 5 4 3 6 2
Unauthorized  trading 6 10 1 6 7
Manipulative & deceptive trading 1 1 3 4 8
Outside business activities 2 3 4 4 2
Supervision 5 6 4 5 4
Gatekeeper 4 2 2 3 5
Failure to cooperate 2 5 3 4 6
Trading conflict of interest 2 0 0 2 0
Off book transactions 0 2 5 1 3
Trading order violation 0 0 0 1 2
Trading without appropriate registration 0 0 1 1 2
Fraud 0 0 2 0 0
Undisclosed conflict of interest 1 0 0 0 0
Inadequate books and records 0 2 1 0 0


10 Day Investment Account Transferrals

I have succeeded in transferring one of my TD Mutual Fund Accounts (my Emergency Account ) to Questrade (as an experiment, but also to divest from the TD Mutual Fund side of the world), and have found a few very interesting issues that can arise, but the big one for me is the fact that having Questrade took 10 days to do it. Should account transferrals take that long?

Mail Delivery account transferrals

Luckily regular mail was not used

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

The nice part about the 10 days is that even though I had to fill in (by hand) a bunch of forms to authorize the transfer, I then scanned the document and sent it to Questrade, who then seemed to start working on it within a few hours (which is a bit faster than a lot of times when I have dealt with other Bank branches).

The sticking point for me was the 10 day wait to do the transfer. While I can understand it taking a while if the accounts where Registered savings accounts (RRSP, RESP, RDSP, LIRA or the like), this is just a Mutual Fund account going to a Questrade account? Seemed a little long.

I could have done this manually, by following these steps

  • Cash out all Funds held in my Mutual Fund account (however in this case it is a bit messier because they are E-series accounts, so I would first have to transfer the funds to the TD Money Market account, and then cash that fund out). Estimated time for this to take 3 days or so (if you start in the morning).
  • Take Funds from sale and transfer it via on-line banking tools to Questrade account. This could take 2-3 days until funds are in and usable in the account.

As you can see even in the worst case this should have taken 7 business days (and that is mostly due to the E-series funds being involved), so really not sure why this took 10 days?

I also tripped over the fact that either Questrade or TD Mutual Funds will not transfer assets in kind, as I was holding E-series funds. My guess is that TD Mutual Funds did not want to transfer the funds, but I never got a clear statement from Questrade about who(m) was to blame, so I was only able to do a transfer of funds (not in kind) for the account. The nice part is, I got an e-mail telling me this, I was able to update my form, scan it, and get everything back on track in about 2 hours.

At the end of it, with a few “pot holes” on the road, it did take 10 days, but I guess it is not as bad as it could have been (those pot holes with other banks might have taken an entire month). I have 1 or 2 other TD Mutual Fund accounts, that I suspect are either going to TD Direct Investing or to Questrade.

Full Disclosure: I am also a Questrade Affiliate (i.e. I put ads on my site, and if you open an account using them, I get paid).


Premium Artisan Automated Investing Profiles

This is the only thing that has not been used to try to get folks interested in the alleged new FinTech world, the Premium Artisan Automated Investing Profiles .

Premium Artisan Automated Investing Profiles

Beautiful Artisan Investing Looms
Image courtesy of worradmu at FreeDigitalPhotos.net

What do I mean by FinTech? Well you might ask, let’s go with Wikipedia’s view:

Financial technology, also known as FinTech, is an economic industry composed of companies that use technology to make financial services more efficient. Financial technology companies are generally startups founded with the purpose of disrupting incumbent financial systems and corporations that rely less on software.

Artisan Investing?

Artisan Investing™ would imply: Individual or customized (and naturally highly researched), investing plans and everyone likes to feel like they are not just one of the unwashed masses. Your investing would be taken care of in an Artisan way, using only the best techniques, methodologies and investing concepts. The ETFs used in your profile would only be of the highest quality, and only invest in companies that create the highest quality products.

However, if we view the term Artisan as meaning:

a worker in a skilled trade, especially one that involves making things by hand.

then the concept of Artisan Investing™ is completely ludicrous (of course), since FinTech implies automated or “… not made by hand”. FinTech implies using technology to do things well, since Artisan implies using “tried and true old school methodologies”.

Artisan is getting tacked onto all sorts of products and services, why not “new” financial technologies, as well? Soon to be available from your local trading housePremium Artisan Automated Investing Profiles.


Financial Web Page Usefulness

After checking out yet another Financial Web Page (i.e. a Mutual Fund firm)  I ended up putting together this interesting Ven Diagram of the information I was able to discern from the site:

financial web page usefulness

So Many Terms So Little Information

I realize most web sites are rarely full of useful information (some might say the same of this site), but a little more information might be helpful.

It is a simple list of what folks want:

  • Fund allocations
  • All fees charged explained clearly
  • Performance history

We don’t want photos of folks frolicking in meadows.

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Ideal Portfolios

That is one of the questions that I have been asked by many folks, and as most of my regular readers know, I am not that sophisticated when it comes to investing, so I borrow ideas from folks who seem smarter than me, for the concept of ideal portfolios.

The first sample portfolio I started with and the one I base a few of my Investment Vehicles on, is the Sleepy Mini-Portfolio which I first read about on the Canadian Capitalist. This is an easy enough portfolio to start with, but you need to open either an account with TD/Waterhouse or an E-Series Mutual Fund account with TD.  The basis of this is the following TD Mutual Funds

TDB909 – TD Canadian Bond Index (e-Series)
TDB900 – TD Canadian Index (e-Series)
TDB902 – TD US Index (e-Series)
TDB911 – TD International Index (e-Series)

As the CC mentions in his article:

The initial asset allocation will be quite simple: 20% bonds, 20% Canadian equities, 30% US equities, 30% International equities.

Now that is a very simple portfolio for those who really don’t know much, but want to start learning about investing. Do you have to follow those breakdowns ? Of course not but if you don’t know your elbow from a hole in the ground this is a nice ground floor Couch Potato Like passive investment portfolio. Re-balance in some fashion every year and that’s it. Also note that the CC has moved on to BMO Investorline as his investment house.

Think that is sissy kids’ stuff, you could look at the CC’s Sleepy Portfolio which has more aspects to it, and does rely on having a real trading account. It uses Exchange Tradeable Funds (ETF’s) but follows the same kind of Couch Potato concepts.

Other folks have their ideas too, friend of this site Larry MacDonald has his own One Minute Portfolio which he boasts only needs about a minute’s attention every year (fighting words in the investing world). What is in this Miracle Portfolio? To quote Mr. MacDonald (noted former Economist and current Financial Writer):

Consisting of just two exchange-traded funds (ETFs), one tracking stocks and the other tracking bonds, the portfolio requires little time or effort.

Sounds simple enough that even I might understand it!

What’s that you said, these portfolios are not Macho enough for you? Go visit our old friend Mr. Dan Bortolotti at the Canadian Couch Potato.  He has remodeled many of his Couch Potato Portfolios for 2014, and has a plethora of different choices:

  • Global Couch Potato
  • Complete Couch Potato
  • Or the Ultra-Macho Uber-Tuber Portfolio

Really all you need to do if you want to start DIY investing is look at a few of the better writers out there, who specialize in Fund Analysis and Portfolio discussions and start with one of their examples, you would be surprised how much you will learn just from doing this. You can even “Ask the Spud” a question if you wish (Dan will answer, most of the time).

Yes, you can go to a financial analyst if you wish, but you might end up with a similar portfolio, or worse a bunch of funds with much higher MERs, in areas that you don’t understand.



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