Canadians, even those with investments, do not think of themselves as "investors," according to a study commissioned by the British Columbia Securities Commission (BCSC) released Jan. 24.
The cross-Canada 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 showed that whether or not they identify 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), says the BCSC.
More likely to track goals and understand fees
They are also more likely to 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). They will also 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.
The size of a person's portfolio makes a difference as to whether someone identifies as being an investor, the study found. 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.
"One obstacle to adopting an investor mind-set is knowing where to turn for help – in fact, 41 per cent of Canadians in our survey said they aren't sure where to find independent information about different investments," McDonald said, who recommended the BCSC’s investor education website as a good place to start: InvestRight.org.