Study generates new understanding and insight into client knowledge
and perceptions about investing with an advisor
VANCOUVER, Nov. 3, 2015 /CNW/ - The British Columbia Securities Commission (BCSC) today released the Smarter Investor Study, national research that examines client-advisor relationships in Canada, and introduces a new lens for understanding how personality affects Canadians' investment decisions.
"Our Smarter Investor Study identifies five personality types within our sample group – confident, diligent, impulsive, reserved, and tumultuous," said Brenda Leong, Chair and CEO of the BCSC. "What we found is that your personality plays a role when it comes to how you invest, particularly when you work with an advisor."
Investors can find out their own personality and how it impacts their investing decisions by taking the Smarter Investor Quiz.
The Smarter Investor Study asked Canadians whether they knew their investment goals, were confident their investments were suitable, understood the investments in their portfolio, and were confident when making investment decisions. The study measures the current state of how investors feel about these issues using the Smarter Investor Index, giving respondents a score between 0 and 100.
The study also looked at Canadian investors' knowledge, attitudes, and behaviours to understand how they differ when they work with an advisor and when they do not. In all cases, those who know, feel, and do the right things report attitudes that give them a higher index rating.
One key finding reveals that while Canadians in general—investors and non-investors alike—index at 62 on the 100-point scale. Those who work with an advisor are at 70 out of 100.
Other key findings include:
- While 30% of Canadians 35 and older invest with an advisor, more than half are not sure what they pay and less than one in five knows how their advisor is paid or have never asked about compensation.
- Six in 10 Canadians (61%) who invest with an advisor say that they always read the statements they received.
- Less than half (46%) of Canadians who invest with an advisor report having checked into the advisor's background before they began working with them.
- Of those who say they did a background check, slightly more than half (53%) checked their advisor's registration.
- 30% of Canadians 35 and older invest with an advisor. Of the 70% who do not, 19% are DIY investors (those who invest but do not work with an advisor). A further 52% do not have any investments.
- Investors recognize that they have responsibilities. The study asked which of various responsibilities investors believed were either wholly or partially theirs when working with an advisor. The highest agreement for any one item was 76% (asking questions), while only 40% agreed that doing independent research was a part of their responsibility.
"Investors need to know the importance of being actively involved in their relationship with their investment advisor and advisors need to encourage their clients in this," said Leong. "Our study shows that investors who know the most, have the right attitudes, do the right things, and whose advisors do the right things, all score well above average on our Smarter Investor Index."
About the Study
The Smarter Investor Study was conducted by Innovative Research Group Inc. in August 2015. It comprised an online survey of 2,407 Canadians aged 35 and above (the demographic most likely to invest). This included an over-sample of 1,011 British Columbians.
Probability samples of this size would have an estimated margin of error of +/-2.8 percentage points for the national sample and +/-3.1 percentage points for the BC sample, 19 times out of 20. The estimated margin of error will be larger within each sub-grouping of the sample.
The Smarter Investor Study drew from research pointing to a "Big 5" set of traits that define personality—extroversion, agreeableness, conscientiousness, emotional stability, and openness to experience—to calculate each trait and sort survey respondents into one of five personality types.
The Smarter Investor Quiz gives quiz takers the opportunity to discover their personality among the five types—confident, diligent, impulsive, reserved, and tumultuous.
About the British Columbia Securities Commission (www.bcsc.bc.ca)
The British Columbia Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:
- A securities market that is fair and warrants public confidence
- A dynamic and competitive securities industry that provides investment opportunities and access to capital
Learn how to protect yourself and become a more informed investor at www.investright.org
SOURCE British Columbia Securities Commission
For further information: Media Contacts: Richard Gilhooley, BCSC Media Relations, Office: 604-899-6713; Jannine Rane (Toronto), FleishmanHillard, Office: 416-645-3662, Cell: 647-987-4457; Grace Hon (Vancouver), FleishmanHillard, Office: 604-688-2549, Cell: 604-839-6770; Public inquiries: 604-899-6854 or 1-800-373-6393 (toll free)