Industry News

Research indicates that age and personality types have a significant impact on how clients learn about investments and financial services

By Tessie Sanci |

Financial advisors who would like to increase their clients' investment literacy should be aware that one approach does not resonate with all Canadians equally as they absorb information differently. Thus, having an understanding of these various personalities could help advisors increase investor engagement, according to a panel discussion at the Investment Funds Institute of Canada's annual leadership conference in Toronto on Thursday.

For example, research indicates there are three distinct ways in which each age-based demographic learns more about financial services, according to Edwin Weinstein, president of Toronto-based Brondesbury Group and an industrial psychologist who conducts research in financial services for the private sector and regulators.

Baby boomers and "traditionalists" over the age of 70 are the oldest groups and Weinstein's research finds that they're the most likely to go to their financial advisors with questions and for services. They will then use the Internet to verify what their advisor has told them.

Those in Generation X differ as they first go online to learn more about different investment options and financial services companies, said Weinstein: "They see what the common truth is and what is just a sales pitch. After they have made up their mind, they go to their advisor and they judge their advisor against that independent information."

Lastly, millennials use technology, and more specifically social media, to learn what their peers think; they would then put more stock in a peer's opinion than that of a professional advisor, Weinstein explained.

Meanwhile, the B.C. Securities Commission (BCSC) has also researched how Canadians interact with the financial services sector and found that there are five distinct investor personality types. Having an understanding of these personalities could help the industry and consumers determine the best ways to learn more about investments.

In fact, the BCSC used this research on personality types to develop its own investor education tool, which is found on its website (http://quiz.investright.org/personalities/). It produced a quiz for Canadians in which their answers would dictate their personality types.

"It told you your strengths as an investor and where you may be lacking," said Pamela McDonald, director of communications and education with the BCSC. "What we hoped people would do is go to our website and use it to learn more about where they can bolster themselves in those areas where they needed some support."

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