Personality plays a key role when investing: BCSC

30% of Canadians 35 and older invest with an advisor

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When it comes to choosing investments, personality may have more to do with it than advisors and their clients realize. In fact, a study by the BCSC finds that an investor’s personality plays a key role, particularly when he works with an advisor.

The study asks Canadians whether they knew their investment goals, were confident their investments were suitable, understood the investments in their portfolio, and were confident when making investment decisions. The study measures the current state of how investors feel about these issues, giving respondents a score between 0 and 100.

The study also looks at Canadian investors’ knowledge, attitudes, and behaviours to understand how they differ when they work with an advisor and when they do not. In all cases, those who know, feel, and do the right things report attitudes that give them a higher index rating.

One key finding reveals that while Canadians in general—investors and non-investors alike—index at 62 on the 100-point scale. Those who work with an advisor are at 70 out of 100.

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Here are some other findings.

  • While 30% of Canadians 35 and older invest with an advisor, more than half are not sure what they pay and less than one in five knows how their advisor is paid, or have never asked about compensation.
  • 61% who invest with an advisor say they always read the statements they receive.
  • 46% who invest with an advisor report having checked into the advisor’s background before they began working with them.
  • Of those who say they did a background check, slightly more than half checked their advisor’s registration.
  • 30% of Canadians 35 and older invest with an advisor. Of the 70% who do not, 19% are DIY investors. A further 52% do not have any investments.
  • The study asked which of various responsibilities investors believed were either wholly or partially theirs when working with an advisor. The highest agreement for any one item was 76% (asking questions), while only 40% agree that doing independent research was a part of their responsibility.

Investors can find out their own personality and how it impacts their investing decisions by taking the Smarter Investor Quiz.

This article was originally published on Advisor.ca.

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