An interesting piece in the NY Times talked about how high net-worth, older investors in the United States are being targeted for investment fraud. The articles calls investment fraud a “growth business.”
There is no question that the same thing is happening here. We have significant populations of older Canadians living in communities like Victoria, Kelowna, and White Rock, providing unlimited opportunities for fraudsters.
The only thing that prevents investment fraud from happening is investors’ ability to protect themselves. And, therein lies the problem. Many investors don’t know how to protect themselves.
We know that the main incentive for older Canadians to take more risk is the promise of greater returns.
In a recent survey of about 2,500 older Canadians (50+), we found out that at least 2-in-5 don’t understand the fundamental relationship between risk and return. Only 1-in-4 has a realistic expectation of the current rates of return for their investments.
Think about why these findings are so significant. If you are one of the almost 45% of Canadians who don’t understand the concept of risk and return, you are more likely to fall for any of those fraudulent offers that are being made every day – on the Internet, in sales seminars, on the telephone, or through a friend or family member.
That is why we launched a three-year Be Fraud Aware campaign – to get the message out to people about how to protect themselves.
It is never too late to become better informed about investing!
World Elder Abuse Awareness Day occurs every June 15, and June 2 to June 8 is Seniors’ Week in BC. In order to bring attention to the issue of financial abuse of seniors, we are running a series of blog posts this month. In this post, I will focus on some findings from our 2012 […]