{"id":602,"date":"2016-06-03T12:08:22","date_gmt":"2016-06-03T19:08:22","guid":{"rendered":"https:\/\/chaltenadvisors.com\/blog\/?p=602"},"modified":"2016-06-03T12:08:22","modified_gmt":"2016-06-03T19:08:22","slug":"canadian-investor-survey-encouraging-and-worrying-at-the-same-time","status":"publish","type":"post","link":"https:\/\/chaltenadvisors.ca\/blog\/canadian-investor-survey-encouraging-and-worrying-at-the-same-time\/","title":{"rendered":"Canadian investor survey – encouraging and worrying at the same time…."},"content":{"rendered":"

The Canadian Securities Administrators (CSA) just released its\u00a02016 CSA Investor Education Study<\/a>. \u00a0Some of the findings are encouraging while others are a little bit worrying. \u00a0There are clearly still key gaps in investor knowledge and behaviour. \u00a0For example while many investors rely exclusively on advisors for investment information and knowledge very few investors actually check to see that their advisor has the appropriate registrations. \u00a0Some other key points:<\/p>\n

Risk Tolerance:<\/p>\n

To begin with, findings show that more and more people seem to be paying attention to their risk tolerance<\/strong><\/em> which is great! \u00a0Risk tolerance is what should drive the mix of different investments that you hold, often referred to as asset allocation. \u00a0Risk tolerance is driven by your need, ability and willingness to take risk and should be informed by your current financial situation as well as near and longer term financial planning goals. \u00a0Risk tolerance can definitely change as your circumstances change or as you enter different stages of life so it is worthwhile checking periodically to ensure your investments are suitable for your risk tolerance.<\/p>\n

Investment Knowledge:<\/p>\n

Survey respondents were asked to answer seven questions to assess general investment knowledge. \u00a06 of 10 people answered 4 or more questions correctly which is about the same as in previous surveys. \u00a025% of respondents answered 6 of 7 questions correctly indicating a “high” level of investment knowledge. \u00a0Older respondents and those with high incomes\u00a0tended to exhibit higher investment knowledge than the general investor population. \u00a0Interestingly, passive investors showed a similar level of knowledge to that of active investors. \u00a0The way these results are\u00a0highlighted\u00a0in the report seems to indicate a desire\u00a0for the results to be viewed positively. \u00a0Flip it around and it reads that 4 in 10 Canadians can’t answer correctly a majority of basic questions about investing. \u00a0That is worrying – lack of education plus lack of transparency around risk, costs and fees is what gets a lot of Canadians in trouble<\/strong>.<\/p>\n

Fraud:<\/p>\n

22% of Canadian investors surveyed were approached with fraudulent investment schemes. \u00a0This is shockingly high and\u00a0clearly the rewards for would-be fraudsters remain as\u00a0the\u00a0prevalence of fraudulent approaches has only declined moderately since 2012. \u00a0What is unfortunate is that 68% of respondents didn’t report to any authority that they’d been approached and 53% of those who’d actually been defrauded didn’t report it to anyone! \u00a0Why don’t people report? \u00a0Respondents indicated mainly that they thought reporting would be overkill or that they didn’t know how to report it. \u00a0If you feel that you have encountered a fraudulent investment please report it to your local provincial securities regulator<\/strong>.<\/p>\n

Advisor registration:<\/p>\n

3 out of 5 respondents did not check their advisor’s registration. \u00a0The sale of investment products and the provision of investment advice is strictly regulated in Canada – we suspect a lot of fraud wouldn’t occur if people simply checked to see that whoever was offering investments to them was legally registered to do so. \u00a0Many investors are not even aware that there is a registration process. \u00a0Once made aware, Canadians do\u00a0agree it is actually important to check and 80% say they would do so in the future. \u00a0So please make sure to check that your advisor has the required registration to offer you investments or investment advice.<\/strong> While you’re at it, note whether your advisor is required by law to act in your best interest – surprisingly few are.<\/strong><\/p>\n

Source for investment information:<\/p>\n

It’s actually this section that ties the whole report together as far as we’re concerned and reveals the real cause for concern<\/strong>. \u00a0Investors’ primary source of investment information is from investment advisors. \u00a0Advisors can be a great information source.\u00a0\u00a0However, when the general level of investment knowledge is low, the prevalence of fraud high, the vast majority of advisors are not bound to act in their clients’ best interest and you have investors not checking if advisors are registered, it provides a fertile ground not only for fraud but more generally for investors to\u00a0get into trouble.<\/strong><\/p>\n

Regulation is changing in Canada but investors still need to take responsibility to increase their own awareness and to educate themselves. \u00a0The CSA website<\/a> has some useful pages for investors in that regard.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Canadian Securities Administrators (CSA) just released its\u00a02016 CSA Investor Education Study. \u00a0Some of the findings are encouraging while others are a little bit worrying. \u00a0There are clearly still key gaps in investor knowledge and behaviour. \u00a0For example while many investors rely exclusively on advisors for investment information and knowledge very few investors actually check […]<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,14,13],"tags":[],"class_list":["post-602","post","type-post","status-publish","format-standard","hentry","category-all-posts","category-investment-industry-issues","category-regulation"],"_links":{"self":[{"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/posts\/602","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/comments?post=602"}],"version-history":[{"count":2,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/posts\/602\/revisions"}],"predecessor-version":[{"id":604,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/posts\/602\/revisions\/604"}],"wp:attachment":[{"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/media?parent=602"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/categories?post=602"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/chaltenadvisors.ca\/blog\/wp-json\/wp\/v2\/tags?post=602"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}