Advisors would all agree: the best clients are educated clients. But a lot of clients aren\u2019t there yet, and it falls to advisors to help educate clients.
The Internet can help you help your clients better understand the intricacies of investing. There are a number of tools and tutorials that can turn your clients into informed investors. Here are three excellent Web sites to pass along to clients:
Investor Education Fund<\/b>
www.investored.ca<\/I>
Justice may be blind, but it isn\u2019t dumb. A perfect example of fair play at work is the Investor Education Fund<\/b>, which was created by the Ontario Securities Commission<\/b> and is financed by the penalties that the OSC slaps upon the crooks and rule-breakers of the business world.
The mandate of the fund, which operates independently of the OSC, is to educate investors on how to use financial information effectively and how to develop the know-how to make informed financial decisions.
The fund\u2019s Web site \u2014 www.investored.ca \u2014 currently \u201cspotlights\u201d three useful lesson: learning to read account statements; working with an investment advisor; and understanding nine popular financial products.
The first lesson offers investors some handy tips, such as making a checklist to track transaction slips and records so they can be compared with the individuals\u2019 account statements, double-checking beneficiaries\u2019 names and making sure opening and closing balances jibe with previous statements.
The second lesson \u2014 how to ask the right questions when working with a financial advisor \u2014 includes a series of tutorials that pop up in new windows with an audio narrative. There are separate interactive chats between prospective clients and a stockbroker, banker and mutual funds salesman.
The third segment is an extensive yet concise course that clearly explains investment products, including hedge funds, exchange-traded funds, labour-sponsored funds, bonds, income trusts, mutual funds and exempt securities. Click on any topic and a new page opens that poses and then answers a variety of questions on each product.
Further down the home page is an area that focuses on eight issues, ranging from
retirement and pension decisions to investment basics and being alert for possible financial scams.
On the left-hand side of the home page, there is an interactive centre that includes worksheets, games, quizzes and tools, as well as a teacher\u2019s corner, an area for young investors and a glossary of investment terms.
The site is well worth regular visits \u2014 or a mention to clients in your next newsletter or e-mail.
B.C. Securities Commission<\/b>
www.bcsc.bc.ca<\/I>
Another useful educational area for clients is the investor section of the B.C. Securities Commission<\/b>\u2019s Web site. Visitors can enter the site by clicking on the heading \u201cfor investors\u201d on the left-hand side of the home page. The area is divided into four categories.
The first section deals with people who are thinking about investing. It includes an eight-question quiz that tests investors\u2019 awareness of their investment goals and their susceptibility to scams or fraud. It also explains the myriad industry designations out there and has Web links to 15 organizations that offer everything from an associate certificate in financial planning to a specialist in financial counselling.
There is also an extensive area on the basics of investing. It examines topics such as establishing objectives, understanding tolerance and risk, the benefits of diversity and the right asset mix. Just as important, it explains to small investors that they should understand the limits of their own knowledge about the waves of financial products available.
The BCSC\u2019s second section deals with \u201cinvesting now,\u201d and includes an investment planning worksheet, tips for communicating with an advisor and reading prospectuses, as well as an Investors Bill of Rights, which offers 10 tips on dealing with the financial services industry.
The last two areas cover investor protection, investment clubs, filing a complaint against a company or a registered rep, and checking the System for Electronic Disclosure by Insiders (www.sedi.ca) for insider trades.
Investment Funds Institute of Canada<\/b>
www.ific.ca<\/I>
The Investment Funds Institute of Canada<\/b>\u2019s Web site may not be the best resource for small investors, but clients who have money socked away in mutual funds may find it worth a monthly visit.
Although much of the site is devoted to industry professionals, clients would probably appreciate three or four areas that are accessible from the home page. The first is the overall industry statistics, which are on the left-hand side of the home page. They are updated once a month. As of Sept. 30, assets under management across Canada are approaching $550 billion, held in almost 50 million separate unitholder accounts.
@page_break@Also, a click on \u201cinvestor information\u201d in the centre of the home page leads to a useful glossary of more than 100 common investment terms. The area also holds a lengthy list of frequently asked questions about mutual funds that begins with a brief history of the institute, which was created in 1962, and a list of its member firms and their Web site addresses.
The section also offers a variety of articles, such as how mutual funds are regulated, how the investments are protected, an explanation of fund fees, how to monitor fund performance, tax-smart fund investing and investment strategies for young investors and senior citizens.
The media section is also worth a visit, as it includes recent speeches by IFIC chairwoman Brenda Vince and addresses to the institute\u2019s annual conferences.\tIE<\/b>
If you have Web sites to share with IE readers, contact Glenn Flanagan at gflanagan@sympatico.ca.<\/I>
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