Securities watchdog says people at risk because they don't see themselves as investors

Canadians, even those with investments, have trouble seeing themselves as “investors,” according to a new study commissioned by the British Columbia Securities Commission.

The survey revealed that less than one third (30 per cent) of Canadians think the term “investor” describes them well. Even among the two-thirds of Canadians who have an investment (any kind of savings beyond a savings account), only 40 per cent identify as investors.

“These results reveal a troubling disconnect between people’s image of themselves and their financial reality,” said Pamela McDonald, the BCSC’s director of communications and education. “Anyone with investments is effectively an investor. If people don’t see themselves that way, there is a good chance they won’t do the things that investors should do, like assessing their tolerance for risk, developing investment goals and sticking to them, and looking at the fees they’re paying.”

The survey of over 2,900 Canadians showed that identifying – or not – as an investor has clear impacts on people’s knowledge, attitudes and behaviours. Canadians investors who see themselves as such are more likely to say that they:

• Understand the risks and benefits of their current investments (88 per cent, compared to 62 per cent who don’t identify as investors)
• Know their investment goals and are on track to meet them (85 per cent, compared to 48 per cent who don’t identify as investors)
• Have a good understanding of fees and charges paid on investments (74 per cent, compared to 42 per cent who don’t identify as investors).

Gender has a noticeable impact on whether a person’s comfort with the “investor” label: 47 per cent of men who have investments embrace the term, compared to 32 per cent of women with investments.

The size of a person’s portfolio also makes a big difference. Among those with portfolios of less than $50,000, 24 percent say “investor” describes them well. That compares with 50 per cent of those with portfolios between $100,000 and $250,000, and 70 per cent of those with portfolios over $500,000.