If you suspect you may have lost money because your advisor or firm acted improperly, you may be eligible for compensation. The first step is to make a complaint directly to your firm. If your efforts are unsuccessful or you are not satisfied with the response, you can then consider other options to recover your money.
There are several different ways for investors to seek compensation in the case of advisor or firm misconduct. Each option is different. Most require that you try to resolve your complaint with your firm first. Some options are free and time limits for using services or taking legal action may apply. Although IIROC is not directly involved in the compensation process, it requires all IIROC-regulated firms to participate in the ombudsman and arbitration programs if the client chooses this option. For Quebec investors, participation by firms in the AMF’s mediation program is optional.
Arbitration is private, confidential and less formal than a court. The arbitrator can award up to $500,000 in compensation to the investor, plus interest and legal costs. The investor is not required to hire a lawyer, but arbitration is a legal proceeding and the investment firms are always represented by a lawyer. When you file your case, you can decide whether the arbitrator should have the power to award legal costs to a party, in which case the arbitrator may order either party to pay a share of the other’s legal costs. Therefore, this could result in your paying a share of the firm’s legal costs. Administrative fees and the arbitrator’s fees are usually divided equally between you and your firm.
IIROC has arranged to have the organizations that offer these independent services explain them to you. The purpose of these videos is to give you, as an investor, a sense of what your experience will be, if you choose to use one of these services.