Bad news: There is no investor protection scheme to make good your losses in a financial market decline.
This clarification is offered up to the people who misunderstand what agencies like the Canadian Investor Protection Fund are all about. “The challenge that we seem to have most often with people understanding our coverage is that we don’t cover a loss in market value,” said Rozanne Reszel, CIPF’s president and CEO. “We are only triggered by insolvency – protected means having your assets returned to you.”
Risk is talked about constantly in the investing world – stock market risk, interest rate risk, currency risk, the business risk associated with a particular stock and social/political risks as well. The risk of your investment dealer going bankrupt and taking your assets with it is not as urgent as these other threats, but it shouldn’t be ignored because firms do fail.
Rob Carrick – Globe and Mail – July 25 2014.
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