May 8, 2008
Vancouver - Recent research reveals that women encounter fraudulent investments less often than men do, and of those approached with an investment fraud, fewer women than men fall victim to investment schemes.
Extensive research conducted by the Canadian Securities Administrators (CSA) in 2006 and 2007 found there are clear differences in investment attitudes and behaviour between men and women. The British Columbia Securities Commission (BCSC) took a further look at this research and discovered that when it comes to fraud, certain attitudes toward investing put women at less risk than their male counterparts.
"In general, women investors are more risk-averse," says Patricia Bowles, BCSC director, communications and education. "They are less likely to believe investing is a gamble, they put more trust in investment professionals, and they are less likely to believe in bending the rules to get ahead in life."
The 2007 CSA Investor Study: Understanding the Social Impact of Investment Fraud found that 36 per cent of women reported someone approached them with a fraudulent investment, compared with 46 per cent of men. Of those approached, 10 per cent of women were defrauded compared to 15 per cent of men. In fact, men are more likely to have been defrauded more than once - 32 per cent compared to 20 per cent for women.
Women also tend to feel more impact from fraud, with more than one-third (34 per cent) of women reporting significant or greater impact compared to more than one-fifth of men. In the 2007 CSA Investor Study, victims of investment fraud reported negative impacts to their health, their personal relationships, and their trust in others.
Although women may be at less risk of falling victim to a fraud, the research shows women need to do more research when investing to become more familiar with the products and investment risk. According to the research, women are less confident than men about where to look for information about investments, and a higher percentage of women tend to rely completely on their financial advisers.
"Seeking the advice of a financial adviser is something the BCSC encourages," says Bowles. "However, it is imperative that people ask questions and do their research when investing in order to better protect themselves from investment fraud."
The CSA commissioned Innovative Research Group Inc., a national public opinion research firm, to conduct the 2007 CSA Investor Study: Understanding the Social Impact of Investment Fraud and the 2006 CSA Investor Index online surveys.
The research is based on two national online surveys of more than 5,000 Canadians, 18 years of age or older, in both 2006 and 2007. The margin-of-error for each survey (5,568 and 5,868 interviews respectively) is considered accurate within ±1.3 per cent, 19 times out of 20.
InvestRight is the BCSC's one-stop resource for investors to educate themselves on how to make informed investment decisions. Its comprehensive website at www.InvestRight.org provides a wide range of tools to help investors develop critical thinking skills they need to protect themselves. If you have questions or problems with an investment or a financial adviser, please call 604-899-6854 or 1-800-373-6393 (toll-free in BC & Alberta).
The BCSC is the independent provincial government agency responsible for regulating trading in securities within the province. If you have questions, contact Ken Gracey, Media Relations, 604-899-6577.
Learn how to avoid investment fraud at the BCSC's investor education website: