You're super excited to invest in an opportunity listed on FrontFundr. You've filled out your profile, chosen the opportunity you want to invest in, funded your investment, and BOOM - your investment requires a review. What gives?

What does it mean when an investment requires a suitability review?

As an Exempt Market Dealers (EMD) we are required by securities regulations to review every investment we process to understand its suitability for the investor. In the majority of cases, this process is completed automatically. In some cases, an investment may fall outside our suitability parameters for a number of reasons (income, goals, size of investment, percentage of portfolio allocated to private companies, employment status, etc.). In these cases we require a Dealer Representative to ensure the investor knows why the investment requires a confirmation (either verbally or written) to complete the investment.

What is the recommended total % of financial assets invested in private companies?

FrontFundr's general recommendation is to allocate no more than 10-20% of your total financial assets (i.e. all investments that you hold through RRSP, TFSA, trading accounts, cash on hand, savings, etc) as investments in private companies. It is also recommended to diversify your investments by not investing more than 10-15% of your Financial Assets within a single company or industry.

Can I proceed with an investment regardless of a review?

Yes! You can absolutely choose to proceed with your investment.
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If you choose to proceed, it is considered a ‘Client Directed Trade’. It is important to note that in some cases we may be required to decrease your investment amount to comply with securities law.

What is an unsuitable investment?

An unsuitable investment is one that does not align with an investor's goals and investment objectives, or it was determined that by proceeding the investor may be exposed to too high of a risk given their current circumstances