Know the Risks and Regulations

"Only with knowledge and action can you achieve power over your future."


All investing has risks.  Knowing and understanding the Risk vs. Reward ratio is what truly makes the difference.  We've all heard that diversity is the golden rule and that if you want to succeed you have to take some risks.  There's pros and cons to both approaches.  We believe in a balanced, thoughtful approach.  One where our clients are have an understanding of the investments they are making and all the risks associated.  

Some of those many risks, for Alternative Investments, can include:

  • Illiquidity – assets like real estate or collectibles are not quickly sold, may need significant time to produce a desired return, or are event-driven.  Alternative investments are often not liquid and thus you will not be able to access your capital until the return is realized.

  • Management (Key Personnel) – as with any investment, who you invest with is probably the most important decision you can make.  Not all investments are created equal but good management in our opinion is the one asset that sets success apart from failure.

  • Reporting Standards - Private companies are not held to the same reporting and communication standards as Public companies.

  • No Securities Regulator - has reviewed the offering and a prospectus is not prepared

  • Governance - There is generally little to no governance standards.

  • Risk of Loss - every industry has good and bad examples of great successes and terrible failures. All investments have their associated risks. If you invest, you must be willing and able to accept the potential for loss.

  • Regulatory Changes – changes in the regulatory environment can be unpredictable and can have both positive and negative consequences.

Each investment however will have its own set of unique risks.  That's why we stress that reading the complete set of offering documents especially the risk section(s) is the only way to truly understand the investment and how it might fit with your portfolio. 

At WealthTerra we believe that a well selected, balanced private market (alternative) portfolio along with traditional investments can provide investors with the potential to achieve their goals.  Each WealthTerra Private Market Advisor (Dealing Representative) will work specifically with each client to determine their risk tolerances, goals and suitability for alternative investments.  They will assist you in identifying the risks, understanding the investment and how it may potentially be suitable for you.  Should you have any questions about risk and the investments a WealthTerra Private Market Advisor has recommended we encourage you to contact us.  If you believe alternative investments may benefit you and would like to speak about some opportunities we encourage you to speak with one or our Private Market Advisors.  

Important Regulations

WealthTerra Capital Management is registered as an Exempt Market Dealer (the “EMD”) in the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, Newfound Land & Labrador.  Our principle regulator is the Alberta Securities Commission.  As an Exempt Market Dealer we are required to comply with all aspects of the provincial securities Act(s) and instrument in which we operate.  National Instrument 31-103 sets out specific responsibilities for an EMD. As such, it is our responsibility to know-our-clients (“KYC”), know-our-products (KYP”) and only conduct trades that are suitable for our clients.

When selecting an advisor it is important to ensure that person is a registered Dealing Representative of an EMD.  All WealthTerra’s Private Market Advisors (Dealing Representatives) are registered as such and for specific jurisdictions.  You can confirm your Private Market Advisor (Dealing Representative) registration on the Canadian Securities Administrators website.

National Instrument 45-106 sets out the eligibility of clients to invest in certain type of securities.  It is our responsibility to ensure all clients meet these qualifications.  As such, we will conduct a know-your-client assessment prior to making any investment recommendation.

The qualifications are set out below, but are not limited too: (For a complete list please reference NI 45-106 or speak with one of our Private Market Advisors (Dealing Representatives)

Accredited Investor

An accredited investor is an individual or institution that is financially sophisticated, can withstand loss or both. An individual is an accredited investor if:

  • he/she is or was ever registered as an investment adviser (broker or mutual fund salesperson);
  • he/she has net financial assets in excess of $1,000,000; or
  • his/her net income before taxes exceeds $200,000 per year in each of the most two recent calendar years or $300,000 combined with a spouse in each of the two most recent calendar years.

Eligible Investor

Eligible Investor is an individual that satisfies certain income and asset test and a relationship requirement.  Your are an eligible investor if:

  • You are a person whose:
    • Net assets, alone with with a spouse, in the case of an individual, exceed $400,000,
    • Net income before taxes exceeded $75,000 in each of the 2 most recent calendar years and who reasonably expects to exceed that income level in the current calendar year,
    • Net incomes before taxes, alone or with a spouse, in the case of an individual, exceeded $125,000 in each of the 2 most recent calendar years and who reasonably expects to exceed that income level in the current calendar year
  • For additional qualification please refer to NI 45-106

We've taken steps to ensure our Private Market Advisors are well equipped to assess your needs and understand your risk tolerance prior to making any investment recommendation.

Understanding - Risks & Regulations

All investing comes with risk there's no way to avoid it.  Alternatives, just like traditional investments, have risks.  Our duty at WealthTerra is to ensure you are aware and have an understanding of those risks present in each investment. Our Private Wealth Advisors (Dealing Representatives) will ensure you understand how each Alternative Investment will effect your portfolio and the regulations which make them available.

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FAQ's - got questions

The best defence is a good offence and the best way to protect your wealth is by educating yourself.  A little time spent on due diligence will go a long way for years to come.  We strongly recommend and encourage our clients to get involved.  Ask questions like "What are the risks with this investment?", "Who are the managers?", "What is their experience?".  Know before you sign on the dotted line!

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Creating Your Portfolio

The trend of adding alternative investments to Canadian's portfolios is increasing.  More and more investors are looking at ways to increase their portfolio's diversification.  To meet this growing demand, WealthTerra offers alternative investment solutions which can be custom tailored towards specific client demands, across major asset classes and regions.

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WealthTerra Capital Management Inc.

WealthTerra Capital Management Inc. is a registered Exempt Market Dealer in the provinces of AB, BC, MB, NL, & SK.  There are risks associated with investing please be sure to read and understand these risks prior to investing.