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Canadian securities regulators publish research on investor knowledge, attitudes and behaviour

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 The Canadian Securities Administrators (CSA) today published findings from a four-year research study that measured what investors know and think about fees and the performance of their investments, and how they interact with advisers. 

The research found improvements between 2016 and 2019 in 40 per cent of the issues examined, particularly in knowledge about fees. 

Two CSA reforms prompted this study. The Client Relationship Model (CRM2) required advisers to provide enhanced relationship disclosure information, pre-trade disclosure of adviser fees and other charges, expanded account statements, annual reports on investment performance, and annual reports on charges and compensation. The Point of Sale (POS) rules required that investors be given plain language information, including an easy-to-understand Fund Facts document about a mutual fund prior to purchase. The amendments took effect in phases from 2014 through 2016, and the CSA announced plans to study the impact of these reforms in August 2016.

“This research provides us with valuable insight into the mind of the Canadian investor," says Louis Morisset, Chair of the CSA and President and CEO of the Autorité des marchés financiers. “We’re seeing that Canadians are gaining more confidence in navigating the marketplace. However, there is room for substantial improvement in the investing experience, especially in understanding the impact of fees on investment returns.”

The research included one baseline survey by Ipsos Public Affairs in 2016 of about 3,500 Canadian investors, followed by six successive waves of surveys, each with about 2,000 respondents, conducted by Innovative Research Group. Each survey included 50 questions that collected information on over 150 measurable items.

More investors in 2019 said they had a better understanding of the impact of fees on investment returns than in 2016 (51 per cent in 2019 vs. 41 per cent in 2016). That growing self-confidence was borne out by the increase (from 43 per cent to 51 per cent) in the portion of respondents who are aware that they pay fees for the operation, management and/or administration of their investment account. Nevertheless, almost half of Canadian investors are not aware of such fees, and the same is true of indirect fees (such as payments made by investment funds to dealers).

Investors across Canada also reported being more confident in monitoring and assessing the performance of their investments. There was an increase in investor confidence in monitoring the change in value of their investments over time (86 per cent very confident or somewhat confident in 2019, up from 80 per cent in 2016) and in assessing whether their investments were on track to reach their financial goals (82 per cent, up from 76 per cent).

Overall, there was a decline in investors’ satisfaction with their advisers. However, four out of five Canadian investors still report being “satisfied” or “very satisfied” with their adviser in 2019.

In some areas, progress is fleeting or non-existent. After two years of increases, 2019 saw a decrease to 44 per cent – almost to 2016 levels – in the portion of respondents who said their adviser discussed fees with them before buying an investment product in the previous 12 months. There was no evidence that advisers are more frequently recommending lower-cost options.

Other influences besides the CRM2 and POS reforms – such as investment firms’ advertising, news media coverage of retail investing, and growing interest in low-cost funds – may have contributed to the changes in investors’ knowledge, attitudes and behaviour found over the study period. 

The insights gleaned from the research will help inform future CSA policy-making and educational efforts to improve the investing experience for Canadians. 

The research reports can be found on participating CSA members’ websites.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

 

For Investor inquiries, please refer to your respective securities regulator. You can contact them here

For media inquiries, please refer to the list of provincial and territorial representatives below or contact us at media@acvm-csa.ca

Kristen Rose                   
Ontario Securities Commission       
416-593-2336

Hilary McMeekin
Alberta Securities Commission
403-592-8186

Sylvain Théberge
Autorité des marchés financiers
514-940-2176
Jason (Jay) Booth
Manitoba Securities Commission
204-945-1660
Brian Kladko
British Columbia Securities Commission
604-899-6713
Steve Dowling
Government of Prince Edward
Island,Superintendent of Securities
902-368-4550
Marissa Sollows
Financial and Consumer Services
Commission, New Brunswick
506-643-7853
David Harrison
Nova Scotia Securities Commission
902-424-8586
Renée Dyer
Office of the Superintendent of Securities
Newfoundland and Labrador
709-729-4909
Rhonda Horte
Office of the Yukon Superintendent
of Securities
867-667-5466
Jeff Mason
Nunavut Securities Office
867-975-6591
Tom Hall
Office of the Superintendent of 
Securities Northwest Territories
867-767-9305
Shannon McMillan
Financial and Consumer Affairs
Authority of Saskatchewan
306-798-4160