Seeking Professional Advice?

You may be wondering who you can turn to in The Bahamas to assist with making investment decisions. Companies and individuals that are approved by the Securities Commission of The Bahamas to provide investment advice use several terms when describing themselves and their activities, including investment advisor, investment manager, wealth manager or broker.

In order to be in the business of offering investment advice in The Bahamas, a firm must be registered with the Securities Commission of The Bahamas. Such a business would be approved to “advise on securities”. The firm’s employees who actually provide the investment advice must also be registered as an “advising representatives” with the Securities Commission of The Bahamas

The Securities Commission reviews applications to ensure the applicant has the appropriate academic qualifications, experience and skills. It also looks to see if there are bad reports about the applicant’s previous conduct in securities matters. Based on its findings, the Securities Commission will either approve or decline applications, so be sure to check that the individual and the firm he or she is employed with are in fact registered to do business with you.

You can also ask the Securities Commission if it has ever taken any disciplinary action against the individual or firm. All firms registered to conduct securities business along with the type(s) of securities business they are approved to conduct appear on this website. Employees and other individuals who are registered with the Securities Commission for certain functions are also listed on the website.

Firms may be registered for various securities business, including managing securities or advising on securities. These activities are different. In the case of a firm that is registered to manage securities, the firm will be able to make investment decisions it thinks are best for its clients who have given them the authority to do so. However, in the case of a firm licensed to advise on securities, the firm provides its clients with suggestions it feels are best for their circumstances, but ultimately must let their clients make the investment decisions themselves.

As you launch your relationship with your new investment advisor, bear in mind that you are ultimately responsible for your money. It is your responsibility to protect it and make it work for you. In addition to researching the advisor, be sure to find out if any investment funds they may offer you are registered with the Commission. Be sure that you fully understand all products you are considering before investing in them.

Sometimes, a simple phone call to the Securities Commission or a visit to our website can help you to avoid becoming the victim of an investment fraud.

Selecting Your Advisor

The obligation of an investment advisor is to offer the best financial advice for his or her particular client. To do this, it is the financial professional’s job to thoroughly understand the client’s goals, financial circumstances and risk appetite, as well as to investigate, monitor and analyse performance of industries and companies and provide that information to the client.

Before you select your advisor, be sure to ask certain questions. Don’t be afraid to ask every question you seek an answer to. You have a right to know you are in careful, capable and licensed hands.

Among the questions you should ask are:

  • What education and professional experience do you have? How long have you been in business?
  • Describe your typical client. Can you provide me with the names of at least two references, preferably clients who can speak to your service?
  • How do you get paid? By the number of transactions, a commission or salary?
  • How would you describe your investment philosophy?
  • How often will you monitor my investments (my portfolio)?
  • How much in total will it cost me to do business with you?
  • Are you on the board of directors of any of the publicly-traded companies I am considering investing in?
  • How often will you be in touch with me? Every transaction? Every month? Every quarter?

Now that you have a list of questions to ask your investment advisor about himself or herself, here are a few questions to ask to help you ensure you understand the product he or she is advising you on:

  • How will the investment make money?
  • What must happen for the investment to increase in value?
  • What are the risks involved?
  • How does the product work?
  • Where can I get more information?
  • What is the dividend payment record of the company for common shareholders and preference shareholders?