Summary:
Before your investment goes through, FrontFundr does a suitability review. Most investments on FrontFundr are reviewed instantly through our automated suitability system.
If we need more information about your financial circumstances, risk tolerance, investment knowledge and objectives, a Dealing Representative will reach out to confirm details before determining suitability.
If an investment is deemed unsuitable, you may still proceed through a Client Directed Trade by signing an unsuitability waiver, though in some cases we may recommend adjusting your investment amount to better meet our suitability requirements.
Suitability Review:
You’ve completed your profile, selected an opportunity, and funded your account on FrontFundr. Just as you’re about to finalize your investment, you’re notified that a review is required. Why is that?
What does it mean when an investment requires a suitability review?
As an Exempt Market Dealer, FrontFundr is required by Canadian securities regulations to assess whether each investment is suitable for the investor.
Most of the time, this happens automatically. Over 75% of investments are processed in real time through our automated suitability assessment system.
If we need more information about your financial circumstances, risk tolerance, investment knowledge and objectives, a Dealing Representative will follow up to confirm the details before completing the suitability determination.
What percentage of financial assets should be invested in private companies?
For retail investors, a common guideline is to allocate no more than 10% of net financial assets (RRSPs, TFSAs, cash, savings, etc.) to private companies.
It’s also recommended to avoid putting more than 10% into a single company or industry to maintain diversification.
These parameters help manage risk and support informed decision-making.
Can I proceed even if my investment requires a review?
Yes, you can. If qualified to do so, you may choose to continue by signing an unsuitable waiver, your transaction can proceed as a Client Directed Trade.
In some cases, we may ask you to adjust your investment amount to better meet our suitability requirements.
What is an unsuitable investment?
An investment is considered unsuitable when it does not align with your goals, investment objectives, or financial circumstances, or when proceeding could expose you to more risk than necessary.