Canadian investors have become significantly more cautious and more pessimistic about their retirement standard of living in the past three months, according to new national research conducted for the British Columbia Securities Commission.

“In light of the recent global financial crisis, we thought it was very important to update our findings about how Canada’s aging population is approaching investment choices,” said Doug Hyndman, BCSC chairman. “The more insight we have into what is happening to investors, the better equipped we will be to provide them with the appropriate tools and protection.”

Online studies conducted by Innovative Research Group in July and in October show that the percentage of investors who think their standard of living in retirement will be worse than it is today rose from 33% to 44% in that period. Those who believe their standard of living in retirement will be better than today remained the same at 20%.

Survey respondents are also reporting they are more wary about investing in today’s financial climate. Overall, risk averse investors — those who want to protect their original investment and minimize risk –have risen from 40% to 56% since July, with the most risk averse category doubling from 12% to 24%.

There has also been a 6% increase in those feeling more vulnerable to declining real estate values, and less than half (48%) of respondents say they are confident when it comes to making investment decisions, compared to 56% in July.

“As we look at the changing attitudes, it is clear that the first response by investors to the recent financial turmoil is to protect themselves by investing more cautiously and taking fewer risks,” stated Greg Lyle, managing director, Innovative Research Group.

The July study polled 1,770 Canadian investors, with a significant sample of investors who are retired or nearing retirement. The second, shorter survey of 1,058 Canadian investors took place between Oct. 16 and 17 to determine whether there has been a shift in investors’ attitudes.

The research was a component of the BCSC’s Capital Ideas conference, held Tuesday in Vancouver.

In response to this and other research findings, the commission is adding a new tool to its investor education Web site (InvestRight.org) that will give investors advice on choosing and working with an advisor, and managing a portfolio on an ongoing basis.

It provides investors with research tips, general guidance on investing, and worksheets investors can use to ask important questions regarding their investments.

“We believe that this guide will provide information and advice that will help investors take an active role in meeting their investment goals,” said Hyndman. “It will help investors avoid common pitfalls and hold market professionals accountable on an ongoing basis.”

IE