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Should You Take the Canadian Securities Course?


Should You Take the Canadian Securities Course?

Contributed by: martingale

Commentary Would the Canadian Securities Course help you to become a better self-directed RRSP investor? The CSC is one of the educational requirements for registration with one of Canada's self-regulatory organizations. For example, you're required to take a course like the CSC if you want to work as an investment advisor or mutual fund salesperson. What does this course teach you, and would it be useful for an ordinary investor managing their own RRSP?

If you have to take this course, you know that already. If you don't know that already, you probably don't have much cause to take the course. For example, you require it if you want to sell mutual funds in Canada. You require it and further courses for other jobs in the investment industry. Generally some work experience is also required. All of this is governed by various self-regulatory agencies.

Whether these regulations and the content of the course act as a barrier to entry which enables financial organizations to extract higher rents from the public, or whether it teaches useful material that ensures good service to the consumer, is something you can work out for yourself. In my opinion, it's a little of both.

The material in the course is strong on money making products, and fairly weak on material that would actually protect a consumer from harm. Passing the course is very little indication that you understand what's important about investing, for example, you won't be taught much of anything about the theory of investment, or the markets, or things like the efficient market hypothesis.

On the other hand, it'll help you learn to talk the talk, and give you a good understanding of how the industry is structured. You'll know how investment advisors get paid, what the various fees involved are, and a general idea of when it's legal to sell someone a product, and when it's not. In terms of useful investment knowledge you'll learn things like how to interpret a stock quote, you'll learn about settlement dates, and even a unit on expensive segregated funds and so forth.

As for the logistics of it: You have to take the course if you are required to take it, but it is self-study. You sign up. You get the materials. You go home and read the book. When you are ready you write a fairly simple multiple choice exam. You study some more. Then you write another exam. Then you get a little certificate that says you took the course.

If you already know all the answers you could sign up for the exam as soon as you enroll in the course and write it probably two weeks later. I'd recommend at least skimming through the book before the exam, but, if you were able to graduate from a university or college, or even highschool, you should have no trouble with this thing.

Again, it's something you would only ordinarily take because your employment required you to, because of those laws and regulations that enable rent-seeking. If you would rather learn something about investment then your local university probably has some excellent economics and finance courses that would be of greater value; and your local library (or bookstore) would have some excellent investment books that I could recommend to you. Of course, those sources of real investment knowledge wouldn't entitle you to extract rents, the way industry certification does.

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