Compliance Memo

Compliance Memorandum 2015-03; Change of fund risk rankings: BMO Guardian

For more information, contact:

Compliance Team
compliance@gpwealth.ca

Date Issued:

April 27, 2015

We have been advised by BMO Guardian that they have recently made changes to the risk ranking of the BMO Global Dividend Class, moving from a “Low - Medium” to a “Medium” risk ranking.

As a best practice, review each client’s portfolio holding any of these funds for suitability. At a minimum, a review of the clients KYC and portfolio must occur prior to the next transaction in the affected plan.

Where the risk ranking of the existing holdings now exceed the client’s stated “Plan Risk Tolerance”, a recommendation must be made to rebalance the client’s portfolio to bring it into compliance.

We must caution financial advisors that updating a client’s risk tolerance to simply match a new risk ranking with existing holdings in an effort to maintain the affected plans onside with KYC may be inappropriate. At minimum, when faced with this circumstance, advisor notes must be maintained documenting a discussion on the amended client risk tolerance.

As always, if you have any questions or comments, contact the Compliance Department by email at compliance@gpwealth.ca.