There are many complex financial products available, and none of them are one-size-fits-all. That’s why it’s vital you understand why your advisor recommends one product over another.

To ensure your informed consent, advisors who are members of the Chambre de la sécurité financière (CSF) have an obligation to provide you accurate, objective and comprehensive information on the products they propose, including their features, benefits and disadvantages, related costs and risk level. This is what we call the duty to provide information.

And it’s not just a matter of providing explanations. Advisors must also make sure you understand them. To do so, they will assess your level of financial literacy and tailor what they say accordingly.

Perhaps you already know what mutual funds are? If so, your advisor won’t talk about them at great length. If not, your advisor will explain their characteristics. For example, their returns are not guaranteed and they offer different mixes of stocks and bonds. Not sure of the difference between stocks and bonds? Once again, your advisor is there to provide answers.

Your advisor may use examples, metaphors or illustrations to help explain things. Real-life examples can also be very helpful because they put you in the shoes of people similar to you, in real situations that may happen to you.

Of course, you need to do your part too, by listening carefully, and above all, by asking questions. Don’t be shy. It’s important you understand everything. After all, you’re the one making the decisions!