A recent survey conducted by the Investment Industry Regulatory Organization of Canada (IIROC) has shown that investors are keen on receiving information and trading advice only from qualified or authorized individuals or firms. Indeed Canada’s financial markets are among the most heavily regulated and historically Canadian brokers have had to implement a variety of policies to protect investors and manage trading risks.
The fruits of this labor has resulted in a positive awareness among investors and traders on what they should be looking out for when seeking a new firm to invest or trade with or when receiving investment or trading advice. According to the IIROC study, 87% of active investors and 67% of aspiring investors feel it’s important that investment advice come from a regulated firm or individual.
These numbers are in contrast to reports we see around the world in the UK, Europe and Australia where the number of investors comfortable with the qualifications of a firm or individual seems significantly less, with thousands of people reaching out for help to regulators and other institutions with inquiries asking to confirm the authorization or qualifications of someone offering investing or trading advice.
It would be prudent to conduct a similar study in the regions mentioned above to see how well-prepared active investors are, since it can be argued that the experience level of the investor and trader also plays a part in their perception or ability to identify an authorized firm or individual offering advice.