CALGARY, Oct. 16, 2012 /CNW/ - The Canadian Securities Administrators
(CSA) today released the 2012 CSA Investor Index, the third survey on investment knowledge, investor behaviour and
incidence of investment fraud among Canadians. The previous two surveys
were conducted in 2006 and 2009.
Key findings this year show that almost 30 per cent of Canadians
surveyed believe they have been approached with an investment fraud at
some point in their life. Over half agreed they were just as likely to
be a victim of investment fraud as anyone else. However, just 29 per
cent of those who believe they have been approached with a fraudulent
investment said they reported the most recent occurrence to the
"Our research shows that Canadians continue to be approached with
fraudulent investments and aren't reporting it," says Bill Rice, Chair
of the CSA. "As securities regulators, enforcement is always a top
priority for us, and to help us investigate investment fraud, we need
to hear from those who have been affected. We encourage investors to
report suspected fraudulent investments and to protect themselves by
recognizing the warning signs of fraud."
The Investor Index also shows that the overall investment knowledge of Canadians is low,
with 40 per cent of Canadians failing a general investment knowledge
test. According to the findings, 57 per cent of Canadians say they are
confident when it comes to making investment decisions. Yet most
Canadians have unrealistic expectations of market returns. When asked
what they think the annual rate of return on the average investment
portfolio is today, only 12 per cent of Canadians gave a realistic
estimate, while 30 per cent provided an unrealistic estimate and 59 per
cent explicitly chose not to hazard a guess.
"Understanding key investment concepts, such as the relationship between
risk and return, can help investors make suitable investment
decisions," explains Rice. "The CSA provides unbiased tools and
resources to help investors learn more about investing and how to
protect themselves from fraud."
New to the Investor Index this year was a series of questions to determine the use of blogs and other social
media tools as a source of investment information. The findings confirm
that social media is emerging as an investment tool, with over
one-third of Canadians saying they have used at least one social media
platform as a source of information about investing. However,
traditional channels still dominate: the most common source of
information about investing is finance professionals, and face-to-face
meetings were deemed to be the most reliable source when making
Other survey findings show that:
At the time the survey was conducted, investors were more optimistic
about achieving their investment targets in the next five years (52 per
cent) than in the next 12 months (39 per cent). Just over half believed
they would be able to maintain or increase their level of current
income in the coming 12 months.
Nearly half of Canadians (49 per cent) say they have a financial
advisor, up from 46 per cent in 2009 and 42 per cent in 2006. However,
60 per cent of those with a financial advisor have not ever completed
any form of background check on their advisor.
Thirty-one per cent of Canadians say they have a formal written
financial plan, up from 25 per cent in 2009. Although more Canadians
have a financial plan, they are reviewing it less frequently (78 per
cent say they reviewed their plan in the past 12 months, down from 83
per cent in 2009).
The 2012 CSA Investor Index is a mixed methodology study combining a telephone study with an
in-depth online study. Innovative Research Group interviewed 6,911
Canadian adults online between May 17 and 31, 2012. The online sample
was weighted by age, gender, and province and territory using 2011
Statistics Canada Census data to reflect the actual demographic
composition of the population. In addition, Innovative interviewed
2,006 Canadian adults via telephone in May 2012 to verify distributions
from the online survey on key weighting variables, including incidence
rates for particular investment behaviours.
A probability sample of this size would have an estimated margin of
error of +/-1.4 percentage points, 19 times out of 20. The estimated
margin of error would be larger within each sub-grouping of the sample.
The 2012 CSA Investor Index Executive Summary and full Report are available online in both English
and French on the CSA website at: www.securities-administrators.ca.
The CSA, the council of securities regulators of Canada's provinces and
territories, coordinates and harmonizes regulation for the Canadian
capital markets. Its mandate is to provide investors with protection
from unfair or fraudulent practices through regulation of the
securities industry. Part of this protection is educating investors
about the risk, responsibilities and rewards of investing.
SOURCE: Canadian Securities Administrators
For further information:
Ontario Securities Commission
Alberta Securities Commission
Autorité des marchés financiers
British Columbia Securities Commission
Manitoba Securities Commission
New Brunswick Securities Commission
Nova Scotia Securities Commission
Saskatchewan Financial Services Commission
PEI Securities Office
Office of the Attorney General
Financial Services Regulation Div.
Newfoundland and Labrador
Office of Yukon Superintendent of Securities
Nunavut Securities Office
Northwest Territories Securities Office