CSA encourages informed investing and fraud prevention during Investor Education Month

MONTREAL — As Canadians increasingly encounter investment information and opportunities online, the Canadian Securities Administrators is marking Investor Education Month by encouraging investors to stay focused on long-term goals, critically assess and verify information they see online, and take steps to protect themselves from investment fraud.

“Knowledge is one of the most effective tools investors have to achieve their financial goals and protect themselves from fraud,” said Stan Magidson, CSA Chair and Chair and CEO of the Alberta Securities Commission. “Taking the time to develop an investment plan, check registration, and question unsolicited offers can mean the difference between making an informed decision and falling victim to a scam.”

The themes align with those identified by the International Organization of Securities Commissions through its annual World Investor Week, a global initiative that raises awareness about investor education and protection. This year’s World Investor Week takes place October 6 to 12 bringing together securities regulators and investor-focused organizations from around the world to raise awareness of key issues affecting investors. IOSCO has identified investor resilience, digital deception and fraud prevention as key focus areas amid rapid technological change and evolving risks for investors.

Investor resilience

Market volatility, economic uncertainty and online commentary can influence investment decisions. Building resilience is about developing habits and a plan to help investors stay focused on their long-term goals when uncertainty arises. Investors can build their resilience by:

• Focusing on long-term goals rather than short-term market headlines when making investment decisions.
• Understanding their risk tolerance and investing accordingly.
• Recognizing that market ups and downs are a normal part of investing and avoiding investment decisions driven by fear or anxiety.
• Reviewing their financial plans regularly.
• Seeking advice from registered professionals when needed.

Digital deception

Technology and artificial intelligence are changing how investors access information, but they can also be used to create convincing misleading content. Investors should:

• Be cautious of investment advice from unverified sources on social media. Use trusted sources to confirm investment claims beyond social media posts and videos.
• Be wary of investment advice that relies on hype or emotional appeals
• Confirm that investment professionals, firms, robo-advisors, and crypto asset trading platforms that they are considering engaging with are registered through a Canadian securities regulator.

Investment scams

Fraudsters continue to use increasingly sophisticated tactics to target investors online. Common warning signs include:

• Promises of high returns with little or no risk.
• Pressure to act quickly.
• Unrequested investment offers.
• Limited or confusing details about how the investment works.
• Resistance to answering questions.
• Investment opportunities that seem too good to be true.

Resources for investors

The CSA offers tools and resources to help investors make informed decisions and protect themselves from fraud, including:

• National Registration Search to check whether an individual or firm is registered.
• CSA Investor Alerts to identify firms and individuals that may pose a risk to investors.
• CSA Investor Tools to find information on avoiding fraud, conducting due diligence and connecting with local securities regulators.