BC Business
"We grouped Canadians into five personality types," says Pamela McDonald, director, communications & education, British Columbia Securities Commission. "Every investor has a distinct personality that affects how they invest. The study shows that each personality type exhibits a different approach to investing and working with an advisor." More than 8,400 people...
“We grouped Canadians into five personality types,” says Pamela McDonald, director, communications & education, British Columbia Securities Commission. “Every investor has a distinct personality that affects how they invest. The study shows that each personality type exhibits a different approach to investing and working with an advisor.”
More than 8,400 people have taken the online quiz since it was launched in November 2015, with 140 people taking the quiz every day since the beginning of this year.
(To take the quiz, go to https://quiz.investright.org/)
Of those who took the quiz, 40 per cent have confident personalities, 19 per cent diligent, 12 per cent reserved, 15 per cent impulsive and 14 per cent tumultuous.
Confident people are the most likely to invest and most likely to work with an advisor.
Diligent people are similar to confident people, but are introverted. They read their statements thoroughly, but might not ask about advisor compensation or do a background check.
Reserved people are less likely to work with an advisor, conduct background checks or know how their advisor is paid.
Impulsive people are least likely to read their statements. They typically don’t wait before deciding to invest or conduct their own research.
Tumultuous people are the least likely to invest. They don’t recognize the warning signs of fraud and are more likely to be victims.
McDonald says the results of the quiz hold important lessons for investors.
“We’re all different, so we have different investment comfort levels,” she says. “Base your investment decisions on your risk tolerance and investment goals, not on what you see other people doing.”
McDonald has a few tips for how to become a smarter investor.
“Conduct a background check on your investment advisor,” she suggests. “Know how your advisor is compensated, know what fees are paid for by which services and read your statements.”
McDonald says the BCSC wants investors to be able to protect their financial interests.
“To do that, they should practice ‘the three knows’: Know yourself, know your investment advisor, know your investments,” says McDonald. “If you’re conscientious, you’ll learn to recognize and reject unsuitable investments and the ones that are potentially fraudulent.”