Compliance Memo

Compliance Memorandum 2017-01; Investor Profile Questionnaire

For more information, contact:

Compliance Team
compliance@gpwealth.ca

Date Issued:

May 16, 2017

As you know the Canadian Securities Administrator (CSA) moved on the best interest standard with Consultation Paper 33-404 – Proposals to Enhance the Obligations of Advisers, Dealers and Representatives toward Their Clients. The paper also includes 10 categories of proposed targeted reforms, covering areas such as conflicts of interest, KYC, KYP, suitability, relationship disclosure, proficiency and titles of client-facing reps. 

At a minimum, we believe that the targeted reforms will be implemented and that it would be in our best interest as a firm to get ahead of these regulatory requirements. To address the targeted reforms related to KYC, suitability and disclosure we will be requiring the Investor Profile Questionnaire (IPQ) be completed with a client to support the documenting of KYC and suitability information.

Effective June 30th, 2017, all clients with a Leverage Plan and all clients with $250,000 or more invested will require the completion of the IPQ in addition to your advisor notes when submitting a NAAF or a KYC Update Form. While we are setting a minimum standard for the use of the IPQ we recommend that you consider utilizing the IPQ with all of your clients.

Essential information when completing the IPQ

  • The IPQ consists of 15 questions and is divided into 5 categories; Investment Time Horizon, Investment Knowledge and Investment Objectives with one question in each category, Risk Capacity with 6 questions and Risk Attitude with 5 questions. Review the IPQ and become familiar with the questions and nuances of the questionnaire prior to completing the IPQ with a client.
  • The IPQ is designed to assist you with documenting the KYC and suitability process. It should be used to guide the discussion with a client, and in conjunction with your advisor notes, support the documenting of the KYC and suitability information.
  • It is very important to discuss and note the answer to any question that is inconsistent with the answer to any other question(s); be sure to note the client’s comments. It is crucial that your notes about the discussion be maintained and provided with the IPQ.
  • When completing the IPQ with a client, the questionnaire can be used for several types of plans related to an objective. For example, if the client objective is “retirement savings” then the information from the IPQ can be used to support the KYC and suitability information for an RRSP, LIRA, IPP or any other Plan the client has designated as part of the “retirement savings objective”.
  • In addition to strengthening the KYC process, the IPQ is also a vital part of an Investment Policy Statement, which is the starting point for investment planning.

Click here to view the Investor Profile Questionnaire. You can also retrieve the questionnaire by logging into your secure site, click the “Backoffice” button and then go to the Apps & Forms section. In addition, you can also use the electronic version of the questionnaire in the GP Wealth Plan application.

We are here to help

If you require any assistance in using the electronic version in the GP Wealth Plan, please contact Alex Gubanov, Advisor Services Lead by phone at 416-622-9969 ext. 226 or by email at agubanov@gpwealth.ca.

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