Investors who place a good deal of trust in their financial advisors may also be failing to do their own due diligence as a result, warns the British Columbia Securities Commission (BCSC).

The BCSC on Monday highlighted the findings of a study it commissioned last year showing many clients don’t do their own research when it comes to investing, nor do they read their account statements, relying instead on their advisors.

The National Smarter Investor Study found that although almost half of investors (49%) said that researching the investments recommended by their advisor was their responsibility, only 22% actually did any research. As well, although 74% of investors say they are responsible for reading their account statements, only 62% always read them, the study found.

The high degree of trust that clients place in their advisors is one possible explanation for the gap between what clients believe they should do, and what they actually do, when it comes to investing, the BCSC suggests. For example, the BCSC reports that almost two thirds (63%) of investors who admit to not always reading their account statements, said this is “because they trust their advisor is taking care of their money.”

Additionally, the regulator that more than a third of respondents “said they did not need to understand the risks and benefits involved in their investments, because they trust their advisor to.”

However, investors must be more diligent about their own finances, the BCSC says. In particular, it says that clients should ask their advisor about fees and how they are compensated; check advisor registration; research investments; and, ensure that they understand their own risk tolerance.

“We’re encouraged to see how many investors acknowledge their responsibilities, but we need to bridge the gap between what people know they should do and what they actually do,” says Pamela McDonald, director of communications and education at the BCSC.

“Trust in an advisor is not enough to ensure future financial health,” she adds. “To make the most of their investments, investors need to actively involve themselves in their relationship with their advisor and the decisions they make.”