Canadian investors may talk a good game, but they don’t walk that talk, according to a new survey conducted on behalf of the Canadian Securities Administrators.

According to a survey carried out by Ipsos Reid in July, “Canadians express confidence and believe that they are knowledgeable and responsible about investing. Yet, their behaviour may indicate otherwise,” the CSA says.

The survey found that 85% of Canadians believe that it is important to build up their personal savings, but only 65% have some savings or investments set aside for the future (down from 73% in 2006). Moreover, 60% worry that they do not have enough savings to meet their financial needs.

Just over half of those who do own investment products plan to either stay invested, and 31% will invest more over the next 12 months, while just 8% say they plan to reduce their investments.

The survey results also suggest that Canadian investors are not doing adequate research, or enough financial planning. It found that a majority of Canadians are not accessing information about investments, even though they believe that they would know where to go for this information.

Fewer than half have worked with their financial advisor or someone in a financial institution to create a formal assessment of their willingness to take risk. And, among those who have assessed their risk tolerance, only half have reviewed their risk profile within the past year.

Additionally, only about 25% have a written financial plan that includes clear investment goals, despite the fact that two-thirds agree that having a formal, written plan is important.

“This research clearly shows that Canadians are not doing all they can to make informed investment decisions,” says Jean St-Gelais, chair of the CSA.

Financial fraud also continues to be a serious problem, the survey finds. It reports that 38% of respondents have been approached about a possible fraudulent investment, and, among those who believe that they have been approached, 11% say they have actually invested money in what turned out to be a fraudulent investment (overall, 4% of Canadians have been fraud victims, the same incidence as in 2006 and 2007 surveys).

However, it reports that there is an increase relative to 2007 in the incidence of fraud victims who say they have invested in fraudulent investments more than once. The amount invested has also increased.

While Canadians report that they recognize various “flags” that indicate potential fraudulent investments, the survey found that they are also more likely to trust fraud artists than they were in the 2006 survey. “Fraud victims tend to be over-confident and to be more accepting of investment risk,” it says. The survey also notes that, in addition to those factors, fraud victims are more likely to be do-it-yourself investors, frequent traders, and highly educated.

Ipsos-Reid interviewed 6,319 Canadian adults online, between July 20 and 27, comprised of both a “general population” sample, and a sample of Canadians who say they have been victims of financial fraud. Separately, the firm asked several questions in a national telephone survey of 1,004 Canadian adults between July 21 and 23.

IE