OSC study finds many investors overestimate their knowledge
TORONTO, Sept. 7, 2022
TORONTO, Sept. 7, 2022 /CNW/ - The Ontario Securities Commission (OSC) today published the results of a survey assessing Canadian investors' financial literacy. As individuals take on more responsibility for their own investing, it is essential that they have enough financial knowledge to effectively participate in Canada's capital markets. Investors' knowledge, attitudes, skills, and behaviours are all contributors
to having a successful investing journey.
Overall, the study found a broad range of investment knowledge among Canadian investors, with investors answering 53% of questions correctly on average. But it also found knowledge gaps in a few areas, including:
About 30% of Canadian investors were overconfident and self-assessed their financial knowledge too highly.
The study found self-directed investors were the most financially literate. The average self-directed investor answered 59% of the questions correctly compared to 52% for investors with advisors and 49% for those working with a Robo-adviser.
Investors had the least knowledge when asked about investment costs (36%) and investor protections (44%).
Women (50%) were slightly less financially literate than men (56%).
The Investor Knowledge Study analyzed the responses of more than 2,500 Canadians to 27 financial literacy questions covering a range of investment topics. The online survey was designed by the OSC's Investor Office.
"This report helps us better understand the investing knowledge of Canadians," said Tyler Fleming, Director of the Investor Office at the OSC. "Identifying the knowledge gaps helps us to refine our investor resources, outreach efforts, and our policy development."
While the study identified knowledge gaps and areas for improvement, it should be noted that Canada has one of the highest financial literacy rates in the world. The 2020 S&P Global Finlit survey found that 68% of Canadians are financially literate. Other countries with high financial literacy rates include Australia, Denmark, Finland, Germany, Israel, the Netherlands, Norway, Sweden and the United Kingdom.
The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices, to foster fair, efficient and competitive capital markets and confidence in the capital markets, to foster capital formation, and to contribute to the stability of the financial system and the reduction of systemic risk. Investors are urged to check the registration of any persons or company offering an investment opportunity and to review the OSC investor materials available at http://www.osc.ca.
SOURCE Ontario Securities Commission