Swim with sharks or have test on financial literacy? Albertans feel the same about these options
Fraud Prevention Month has begun in Canada but investors seem reluctant to know more about their finances.
The number of Canadian residents vulnerable to investment fraud is substantial but many simply refuse to enhance their financial literacy. Whereas the authorities have marked the start of Fraud Prevention Month days ago, it seems that the victims of scams are quite reluctant to educate themselves.
In fact, psychology plays a crucial role in shaping investment habits, as per the findings of a study commissioned by the Alberta Securities Commission (ASC). The online survey was conducted through the Angus Reid Forum panel (facilitated by MARU/Matchbox) between January 9-16, 2018, and covered 481 people living in Alberta and 1,017 people living in the rest of Canada.
The study uncovered some of the negative and uncomfortable feelings that Albertans have related to their finances. In fact, Albertans are so uncomfortable that when asked “would you rather” among a list of common fears, roughly the same number of Albertans would choose to be tested on their financial literacy (12%) as would choose to swim with sharks (9%).
Over half of Albertan respondents (53%) described feelings of anxiousness, stress, insecurity, feeling uncomfortable or embarrassed when it comes to their financial future.
Meanwhile, another survey, commissioned by the British Columbia Securities Commission (BCSC), has found that approximately one-in-four British Columbians are vulnerable to investment fraud. In February, the BCSC surveyed over 500 British Columbians on their reaction to an investment offer that claimed “guaranteed” returns of 14 to 25% and “no risk.” Although the claim includes several investment fraud warning signs, 26% of respondents said the offer was “worth looking into.” Even more troubling, 20% of the respondents who would look into the offer said they were interested because they need the money, indicating even greater vulnerability.
Canada has been at the forefront of restricting offer of high-risk financial products. In September last year, the Canadian Securities Administrators (CSA), an organization which has amid its members the securities regulators from 10 Canadian provinces and 3 territories, introduced a ban on binary options. The ban applies to all types of advertising, offering, selling or otherwise trading a binary option with or to an individual.
