Are you an investor? It鈥檚 a simple enough question, but one that a surprising number of British Columbians answer 鈥渘o鈥� to, even though the majority of them are.
Indeed, according to a new study by the BC Securities Commission (BCSC), almost three quarters of Vancouver Island residents (71%) have investments of some kind, yet only 35% see themselves as 鈥渋nvestors鈥�.
Now no one is expecting you to be the next Warren Buffet, but this information is troubling nevertheless, especially because investors who don鈥檛 see themselves as 鈥渋nvestors鈥� may be unnecessarily limiting their investing potential, or worse, negatively impacting it.
鈥淭he study results are concerning because, if you have investments, you really are an investor,鈥� says Pamela McDonald, Director of Communications and Education at the BC Securities Commission. 鈥淲e want people to adopt that mindset 鈥� to feel empowered to do the things that lead to good investment outcomes.鈥�
Understanding the importance of investment fees
One of the best opportunities for making the most of investments is in the area of fees, where small differences can add up to a big impact.
Even a 1% difference in your investment fees can leave a significant dent in your financial future. For example, by paying 2.5% rather than a 1.5% fee on a $50,000 investment, you could reduce total returns by more than $17,500 over 20 years. That鈥檚 a lot of money that isn鈥檛 making its way into your pocket.
鈥淲e all have to pay investment fees, but it鈥檚 important to understand what you鈥檙e paying for and what you鈥檙e getting in return,鈥� says McDonald. 鈥淲e want people to understand that they have choices available to them. We know, for example, that when you go to buy a car you won鈥檛 hesitate to ask questions about fees or commissions, and people shouldn鈥檛 feel anxious about asking those same questions when it comes to investments.鈥�
Since 2016 investment firms have been required to provide investors with annual investment statements that outline the fees they paid in the previous year. It鈥檚 important that British Columbians not only consult these reports, but also ask questions about them.
What are your fees? Are they negotiable? What are you getting in return? Is there another product that could offer the same return for a lower fee? These are all examples of the kind of questions you can ask to ensure that you are getting the most bang for your buck.
Knowledge is power
Whether you鈥檙e working towards something short term like buying a new car or planning for the long haul by getting ready for your retirement, investing is a great way of reaching your financial goals. Whatever you鈥檙e investing for, one key to success is understanding what you鈥檙e investing in.
鈥淭hey say that knowledge is power, and nowhere is that more true than when it comes to the world of investing,鈥� says McDonald. 鈥淩eliable investment advice is not hard to come by when investors turn to a registered investment advisor,鈥� says McDonald.
During the course of their study, the BCSC found that British Columbians are not sure where to look for reliable, unbiased information about investing. In fact a staggering 71% of those questioned said they aren鈥檛 sure where to look for independent investment information.
"You can鈥檛 make informed decisions without reliable information,鈥� McDonald says.
The BCSC鈥檚 investor education website at , has all the information you need to make sure your investments are working for you. Alongside advice on fees and various financial products; the website also offers interactive calculators, tools and quizzes that are designed to help you make more informed decisions about your investments.
"We want to help people feel like they are investors,鈥� adds McDonald, 鈥渂ecause when they think like that, they鈥檒l do the right things.鈥�
Useful information
- Your one-stop-shop for information, tools, and insight into the world of investing.
- A great resource for understanding your relationship with your investment advisor and how to get the most from it.
- Filled with easily digestible videos offering advice and guidance to investors whether they're hardened experts or complete beginners.
