Canadian Securities Course (CSC) Level 1 Practice Exam

What is the registration process of an IA versus an IR?

1. Both complete 90 days of training

2. IA's register with the CSA

3. IA's are employed by self-directed brokerages

4. IR's have a shorter training period

The correct answer is: Both complete 90 days of training

The correct answer is that investment advisors (IAs) and investment representatives (IRs) have different registration processes and training requirements that can lead to some confusion. The statement regarding both needing to complete 90 days of training does not accurately reflect the nuances of the registration process. Investment advisors typically have more extensive training and regulatory requirements since they provide personalized financial advice and may deal with more complex investment products. This often includes completion of a recognized program and acquiring specific credentialing, which is aligned with the standards set by regulatory bodies. On the other hand, investment representatives have a training that is often shorter and focuses on client-facing roles where they primarily conduct transactions based on pre-determined criteria. Their training period is generally less demanding than that of investment advisors. Regarding the correct insights into registration, investment advisors usually register with the Canadian Securities Administrators (CSA) or relevant provincial regulators to provide a broader range of services. Investment representatives work under the guidance of an investment advisor and are often registered with the same firms. The distinction in employment often means investment advisors are not restricted to self-directed brokerages, whereas this tends to be more characteristic of investment representatives. Therefore, while training and registration vary, understanding the roles and regulatory standards is crucial for distinguishing between I