Apparently, Canadians are fully aware of the importance of hiring a professional to devise appropriate investment and financial plans. Yet, there is an odd reluctance to do the right thing, which, among other things, potentially leaves the doors wide open for fraudsters. Here are some scary statistics.
According to the Canadian Securities Administrators’ survey, 88% of Canadians know that having an investment and financial plan is of paramount importance. However, more than half of those surveyed never even contemplated developing one, with or without a professional’s help.
In addition, the same survey found that one third of those interviewed have been approached at some point in time with a deceptive and manipulative investment “opportunity.” However, while 86% of Canadians can spot a crook from a mile distance, only 14% of them actually did something about it.
The last bit of disturbing statistics is that 92% of Canadians understand that while their brokers’ expertise is valuable, nothing beats personal investment research. However, almost half of those surveyed blindly followed their brokers where they may have led them, (or not!).
The bottom line is that Canadians must simply be lazy, because they are far too reliant on their brokers or whoever else might be out there dispensing investment advice. Granted, there is a good reason why we have brokers and why we pay them good money for their knowledge and expertise. But, double and triple checking what is done with our money cannot hurt either, can it?
I’ve always been a huge promoter of investor education, if for no other reason than it is much easier to talk to an investor that understands fully not only benefits of entering capital markets, but the associated risks as well. Another great reason is that although market regulators are doing their best to prevent fraudsters from getting their hands on your money, there is only so much they can do. No regulator has the ability or capacity to pick up on everything. The rest could be picked up by investors themselves, as long as they come “armed and ready” with knowledge.