Taking Action Preparing for a meeting with your financial adviser Define the responsible investment products that fit your investor profile

Based on your risk profile and your values, your financial advisor will suggest products or solutions. You will be better prepared to accept or reject the investment solution your advisor recommends if you have a good understanding of the different strategies and types of responsible investment products offered on the capital markets. You can find a detailed description of these strategies on the Ethiquette website, and a table of RI products currently available that integrate the various strategies.

Here are some important questions you should ask your RI advisor when assessing whether the RI recommendations are appropriate:

  • How do these financial products fit my investor profile and my investment time horizon? How liquid are these investments?
  • How do these investments reflect my values and concerns?
  • What are the minimum initial and monthly investments?
  • Is the capital guaranteed on the investment?
  • What are the past returns of the proposed investment? How do these compare to benchmarks like the S&P/TSX Total Return?
  • What is the management expense ratio (MER)? Are there back-end charges or exit fees (deferred charges)?
  • If the recommended solution includes an RI product:

  • Are the fund managers committed to engaging with the companies in which they invest so as to improve the latters environmental and social practices?
  • What is the fund’s policy on voting at general meetings? How were these rights exercised last year? (Funds have an obligation to provide their proxy voting record).
  • Is the recommended fund transparent about their engagement with companies in the portfolio?
  • Does the recommended fund invest in local communities or have an impact investment component?
  • How often does the manager report on the state of the fund? What are the channels of communication used?
  • How will you update me on the social and environmental impact or performance of my investments as well as the financial?
  • Also ask to consult the Fund Facts, which provides core information about the fund, the fees you will pay, the dealer’s remuneration and your rights (see an example on the AMF website http://www.lautorite.qc.ca/en/fund-facts-conso.html). For more detailed information, you can also consult the fund’s prospectus (simplified prospectus if it’s a mutual fund), which will give you detailed information about the issuer and the securities for sale. By reviewing the fund facts or the simplified prospectus, you will be better equipped to judge whether the investment suits you. You can assess whether the level of risk and potential return fits your investment needs and objectives. You will also find information about the responsible investment strategy followed by the fund manager, although you will often find more details on the RI strategies on the fund website than in the prospectus.