The Canadian Investor Protection Fund (CIPF) is a non-profit organization that protects investors in the event that an IIROC-member investment firm becomes insolvent. If your broker is a member, your account is protected for up to $1 million for combined general accounts (like cash, margin, and TFSAs) and another $1 million for combined registered retirement accounts (like RRSPs and RRIFs). It's a critical layer of security, and we strongly recommend only using CIPF-member firms for your investments in Canada.
To invest in US stocks from Canada, you need a brokerage account that offers access to US exchanges like the NYSE and NASDAQ. Most Canadian brokers do. The key consideration is currency exchange. You can either hold US dollars in your account to avoid conversion fees on every trade, or your broker will convert your Canadian dollars for each transaction, typically charging a significant spread. Look for brokers that offer USD accounts or have competitive foreign exchange rates to minimize costs.
An Exchange-Traded Fund (ETF) is a type of investment fund that holds a diversified collection of assets, such as stocks or bonds, but trades on stock exchanges like a single stock. They offer an easy way to achieve diversification at a low cost. You can buy and sell ETFs through any standard online brokerage account, just as you would with an individual company's stock. Many Canadian brokers now offer commission-free buying (and sometimes selling) of ETFs, making them very accessible.
A risk warning or disclosure is a mandatory statement from a financial service provider that outlines the potential risks of investing. It serves to remind you that the value of investments can go down as well as up, and you may get back less than you invested. These disclosures are a regulatory requirement designed to ensure investors understand that there are no guarantees of profit in the financial markets. Always read and understand these warnings before you commit any capital.
Regulated online brokers are required to implement robust security measures to protect your data. This includes using encryption (like SSL) for all communications, two-factor authentication (2FA) for logging in, and secure data storage facilities. They are also bound by Canadian privacy laws, such as PIPEDA. When choosing a broker, always confirm they offer 2FA and have a clear, comprehensive privacy policy outlining how they handle and protect your sensitive information. This is a crucial aspect of their overall reliability.
Yes, you can transfer your investment account, including registered accounts like TFSAs and RRSPs, from one Canadian brokerage firm to another. The process is typically initiated by the receiving broker through a system called ATON (Account Transfer Online Notification). You will need to fill out a transfer form. Be aware that your current broker may charge a transfer-out fee, but your new broker will often offer to reimburse this fee up to a certain amount to win your business.