Help your client self-identify as an investor

If you’re aiming for greater client engagement, consider helping your client self-identify as an investor. Many clients don’t think of themselves that way, and doing so is associated with positive outcomes, a study commissioned by the BCSC finds.

Less than one-third of Canadians (30%) think the term “investor” describes them well, the study says. Even among the two-thirds of Canadians who have investments (any kind of savings beyond savings accounts), only 40% identify as investors.

“Anyone with investments is effectively an investor,” says Pamela McDonald, the BCSC’s director of communications and education, in a release. “If people don’t see themselves that way, there is a good chance they won’t do the things that investors should do, like assessing their tolerance for risk, developing investment goals and sticking to them, and looking at the fees they’re paying.”

Specifically, the study finds that those who perceive themselves as investors are more likely to say they understand the risks and benefits of their current investments (88% compared to 62% who don’t self-identify as investors), know if they’re on track to meet their investment goals (85% versus 48%), and understand the fees they pay (74% versus 42%).

A growing portfolio might help change clients’ self-perception. Among those with portfolios of less than $50,000, only 24% say “investor” describes them well. That compares with 50% of those with portfolios between $100,000 and $250,000, and 70% of those with portfolios above $500,000.

Helping clients access investment resources might also help, because 41% of survey respondents said they were unsure where to find independent information about different investments.

Identification as an investor also varies by province and gender.

Ontario and the Prairies have the highest identification as investors (42% and 41%, respectively), while the Atlantic provinces have the lowest (32%). British Columbia was middle of the pack, with 37% of investors saying “investor” describes them well.

And almost half of men with investments (47%) embraced “investor,” compared to about one-third (32%) of women.

For full details, see the BCSC study.

About the study: An online survey was conducted from Dec. 7 to Dec. 28, 2018, by Innovative Research Group consisting of a sample of 2,915 Canadians aged 18+. This included an oversample of 1,407 British Columbians. Respondents come from Innovative’s Canada 20/20 Online panel, with additional sample from Lucid and Leger.

Results are weighted to a representative sample of 1,500 at the national level, and to a representative sample of 1,000 for the B.C. oversample. Weightings are based on age, gender, and region using the latest available census data.

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The staff of Advisor.ca have been covering news for financial advisors since 1998.