October - Investor Education MonthQuebeckers say they are responsible for investment decisions yet take little action


Montréal – Following the release of the findings of Investor Index 2009 commissioned by the Canadian Securities Administrators (CSA), the Autorité des marchés financiers (AMF) has analyzed the data related to Québec and established a profile of Québec investors.

Québec investors
Québec investors are more passive and conservative than other Canadians. They trade less and tend to choose investments that offer lower returns but carry fewer risks.

Paradoxically, even though they recognize it is important to look for information before investing (83% agree with this statement), a significant majority of Quebeckers do not do so. In fact, 78% of Quebeckers (versus 66% nationally) did not look for any information about savings and investments during the past 12 months. As well, 57% of Québec investors, the highest percentage in Canada, did not personally do any research before their last investment.

Investors in Québec seem to be confident in their ability to make sound financial decisions. The province accounts for the largest percentage of people (58%) who say they are very or somewhat confident regarding financial decisions. The survey also revealed that a significant majority of Québec investors (72%) do not have a financial plan. However, 66% say it is important to have one.

Nearly one Quebecker in two has a financial advisor (45%). For Quebeckers who have a financial advisor, almost all (93%) say they are comfortable sharing their concerns.

More vulnerable to fraud?
Although a larger percentage of Quebeckers than Canadians (54% versus 45% nationally) believe that financial fraud is commonplace in their province, the survey findings seem to show that they are not more vulnerable to financial fraud than Canadians as a whole.

It is noteworthy that Quebeckers seem to be less bothered by fraudulent schemes via e-mail spam than other Canadians (55% in Québec versus 70% nationally). This finding could be explained, in part, by the fact that such schemes generally unfold in English. In Québec, investment fraud seems primarily to involve friends or family members or persons in a position of trust.

The attitudes of Québec investors might make them, to some extent, more susceptible to fraud, in particular, the fact that they like to enter contests and play the lottery. Also, as noted in the survey conducted in 2007, a larger percentage of Quebeckers continue to believe that one of the ways to make money on the stock market is through trading based on insider information (31% versus 23% nationally).

Reporting fraud
Only 24% of Quebeckers who were approached with an investment fraud reported it to the authorities, one of the lowest rates in the country. An increasing number of Quebeckers are, however, taking action: The rate was up from the 17% who reported investment fraud in 2007. Paradoxically, a larger proportion of Quebeckers claim that it is important to report investment fraud (83% versus 78% nationally) and are aware of a securities regulator in their province (46% versus 38% nationally).

Financial education and young people
Quebeckers consider financial advisors to be the ideal persons to help educate young people about finances and investing. After financial advisors, they feel these notions should be taught to young people in school, preferably high school. Finally, even if three in four parents feel it is very important to teach their children about personal finances, less than half (48% in Québec versus 46% nationally) have done so.

“Although they are aware of the basic principles of investing and the importance of planning for their retirement and reporting investment fraud, the behaviour of Québec investors indicates otherwise. It is important for Quebeckers to develop reflexes that will enable them to make informed investment decisions and protect themselves against fraud,” said Anne-Marie Poitras, Superintendent, Client Services and Compensation at the AMF. “The confidence Quebeckers have in their ability to make sound financial decisions also makes them vulnerable to fraud. The CSA survey reveals that the victims of fraud are often people who claim to be very familiar with savings and investment concepts.”

The Autorité des marchés financiers (AMF) is the regulatory and oversight body for Québec’s financial sector.


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