BMO financial planner loses Ont. couple $47,000

Here’s how to make sure it doesn’t happen to you



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Imagine hiring a financial planner you thought you could trust. Then imagine losing nearly $50,000 after listening to their advice.

This nightmare situation was a reality for a retired couple who, in 2014, sought advice from a BMO financial planner on how to transfer their retirement savings from an American account to a Canadian RRSP, CBC Go Public reports.

Tom and Gloria Ratcliffe first approached two other big banks (CIBC and RBC) both of which told the retirees that the transfer of funds would result in a huge tax hit for them. At BMO, however, financial planner Karen Gill assured them the transfer was possible. When the the couple asked Gill why the transaction wouldn’t be an issue, she reportedly told them “‘Because BMO is such a big organization, we can do things other people can’t do.'”

As it turned out, BMO couldn’t do the $198,000 transfer after all, at least, not without slamming the couple with a $47,000 tax bill from both the U.S. and Canadian governments. What was left went into BMO mutual funds (Gill is a licensed mutual fund dealer).

But all was not lost: The couple approached eventually CBC Go Public, and BMO offered the Ratcliffes a cheque of $50,000 (up from their previous offer of $19,000).

While it’s great that the Ratcliffes recovered their savings, not everyone is so lucky.

Here at MoneySense, readers regularly contact us to share their tales of financial mismanagement. We’ve shared some of their tales here before. Advisors are meant to work with you to grow your money, or help you navigate difficult financial situations, but if you’re not aware of their credentials or aren’t aware of the regulations they should be following, you may be at risk, too.

Here are a few things to watch out for when you approach an advisor to make sure they don’t tank your savings:

1. What are their credentials?

Take a few moments to check the registration of your financial planner before deciding to work with them and learn what they’re licensed to sell you. Most investment advisors are awarded credentials by two organizations: the Mutual Funds Dealers Association (MFDA) or the Investment Industry Regulatory Organization of Canada (IIROC). MFDA-licensed advisors can only sell mutual funds whereas IIROC advisors can also deal in ETFs and individual stocks. Search for your advisor on to make sure they have the credentials they say they do. There are also independent financial planners, who cannot recommend any financial products and usually charge a flat fee or hourly rate and aren’t regulated by anyone.

2. Are they meeting the ‘suitability standard’?

Most advisors in Canada are held to what is called the “suitability standard.” This means they must be able to demonstrate that an investment is appropriate based on the client’s goals, experience, income and risk tolerance. Unfortunately, this standard has a lot of wiggle room—advisors may try justifying even the most unsuitable investments in your portfolio. If your advisor recommends products to you within the first five minutes of your very first meeting with them, beware! It’s highly unlikely that their advice is as carefully catered to your goals and needs as you’d like for it to be.

3. Read the fine print

Avoid signing blank forms thrust into your hands by your advisor before you even open any accounts. One of the oldest tricks in the book is getting clients to hurriedly sign forms without reading them closely so that the advisor can then fill out the rest and misrepresent your risk profile. This tactic leaves you in the lurch if you ever decide to disagree with the way your advisor is running the show. Investment strategy turning out to be riskier than you agreed to? Well, your signature says otherwise. While a tall stack of paperwork may be daunting, take it home and review it carefully. And make sure to ask your advisor for copies of all documents!

That’s not all. Read more on how to make sure you’re not being screwed by your advisor.

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9 comments on “BMO financial planner loses Ont. couple $47,000

  1. I have yet to meet a qualified Financial Planner,and Banks seem to have employee turn over and staff that are always in training.I have been over a year with my money parked in a G.I.C after having been with two different financial planners who talked the talk but could not even crawl the crawl let alone try to walk the walk.I am sure there are some good ones out there,but I am scared to let just anyone practice on me.


  2. Give me a break !!!!! This couple shouldn’t have been given their money back. Yes ….. the BMO advisor didn’t know what she was talking about …. but the red flags should have gone up when two equally large banks as BMO, stated that taxes would be due !!! Come on , this couple took the advise from BMO because it suited them . I dont feel sorry for them. Look at the fiasco with TFSA accounts over the years with employees at the big banks giving out wrong information about their use. In this case ….. this couple should have question the advise given from BMO, when others have stated otherwise!


  3. How does one become an approved Money Sense Financial Advisor


    • Hi Cynthia,
      Check out the MoneySense Approved website for more information on how to become a MoneySense Approved Financial Advisor!


  4. “There are also independent financial planners, who cannot recommend any financial products and usually charge a flat fee or hourly rate and aren’t regulated by anyone.” Although accurate, “aren’t regulated by anyone” comes across as a bit misleading. Regulations focus on the sale of products: mutual funds, stocks, bonds, ETFs, life insurance, etc. Financial planners who limit their business to planning and who do not sell or recommend specific investment or insurance products fall outside of the regulators’ mandates. The good news is that such financial planners avoid the inherent conflicts of interest involved in financial product sales and that consequently require regulation (inadequate though that regulation may be, given the story above)!


  5. Enjoyed this article. Point 3 Oldest Trick in the Book happened to us. Preston Smith, formerly with Richardson GMP and now with Accumen Capital Partners used this on us. Marked all our accounts as 100% Speculative and 100% High Risk. We are 60 years of age! Then proceeded to loose $1,500,000. This compared to our investment objectives of 6% rate of return and preserving Capital. Richardson GMP denied any wrong doing and OBSI was a waste of time. Time to sue!


  6. This article is completely one sided and leaves out some important facts. The Ratcliffe’s like all Canadians must pay income tax on their tax-deferred pension income. The article states the $47,000 is savings when in fact it is income tax that is payable on this type of income. It would appear the Ratcliffe’s don’t believe they have to pay income tax on tax-deferred pension income like the rest of us do. At the very least the $50,000 paid to them by BMO should be included as taxable income on their next tax return.


  7. Speaking of credentials and skillsets, the couple in the article really needed an expert in tax law, which is not necessarily a “financial planner”.


  8. Not all Financial Planners sell product. Many of these are CFP Professionals subject to the Rules of Conduct, Code of Ethics, Fitness Standards and Financial Planning Practice Standards. Check out the Financial Planning Standards Council website


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