Know your rights as an investor

Retail investors should be aware of their rights and choose appropriate advisers who meet their needs and uphold certain professional standards.

This is the advice of the CFA Institute, which has identified 10 basic rights every investor should expect from a financial services professional.

Mr Daryl Liew, co-chair of the Advocacy Committee at CFA Singapore, said: "As investors consider hiring professional help, they should know their rights and what to demand of their financial advisers. What factors should you look out for, and what questions should you ask?"

Here is the CFA's Statement of Investor Rights, which should be used to underpin the questions you can and should ask your advisers.

When engaging the services of financial professionals and organisations, I have the right to...

1. Honest, competent and ethical conduct that complies with applicable law

•Is your practice governed by an ethical or professional code of standards, and may I have a copy?

•Are you and your firm familiar with and willing to abide by the Statement of Investor Rights?

2. Independent and objective advice and assistance based on informed analysis, prudent judgment and diligent effort

•Who will be working on my portfolio, and what are their credentials and experiences?

•What happens to my portfolio if you or members of the team leave the firm?

•Can you provide me with examples of the analysis and process you perform to arrive at investment decisions?

3. My financial interests taking precedence over those of the professional and the organisation

•What regulatory standard, if any, governs our relationship?

•Are you a fiduciary, and would our relationship be held to a fiduciary standard?

•How do you decide which investments to recommend? Are you free to recommend investments sponsored or managed by other firms?

4. Fair treatment with respect to other clients

•What policies are in place to make sure clients receive fair treatment relative to each other?

•How do you ensure clients have appropriate access to products and investment opportunities?

•How do you make sure clients receive adequate support and customer service, especially during a crisis?

5. Disclosure of any existing or potential conflicts of interest in providing products or services to me

•What is your process for identifying and communicating conflicts of interest?

•How are conflicts of interest addressed and mitigated, and can you share an example?

6. An understanding of my circumstances so that any advice provided is suitable and based on my financial objectives and constraints

•How do you get to know your clients and assess their financial needs and goals?

•How do you determine whether recommended products and services are appropriate for my portfolio and can help me achieve my financial goals?

•Will you provide me with a written personal financial plan designated to fulfil my financial needs and goals?

7. Clear, accurate, complete and timely communications that use plain language and are presented in a format that conveys the information effectively

•What means of communication (for example, e-mail, phone, and so on) do you use, and how often should I expect to hear from you?

•How often will we meet in person?

•Can you provide examples of reports, performance statements and other types of communication I may receive from you?

8. An explanation of all fees and costs charged to me and information showing these expenses to be fair and reasonable

•On what basis are you compensated: fee only, fee-based, commission, percentage of assets under management, fixed or flat fee?

•How are these fees calculated, billed and collected?

•Could the proposed fee arrangements lead to conflicts of interest?

9. Confidentiality of my information

•What is your privacy policy for client information?

•How can you certify that my financial and personal information is secure?

•Have you ever had information lost or stolen? If so, how was the situation resolved?

10. Appropriate and complete records to support any work done on my behalf

•How long will my records be retained at your firm, and can I request them at any time?

•Does the firm claim compliance with the Global Investment Performance Standards? (The GIPS is a set of standardised, industry-wide ethical principles that guide investment firms on how to calculate and present results to prospective clients.)

Lorna Tan

•For more information, visit

A version of this article appeared in the print edition of The Sunday Times on June 11, 2017, with the headline 'Know your rights as an investor'. Print Edition | Subscribe