external-link
Skip to content
  • Français
    • Getting startedLearn about the stock market, investment types, and how to get started.
    • Working with an advisorA financial advisor can help you choose investments and manage your portfolio.
    • Making a planHaving a plan can make it easier to make the right investing decisions for you.
    • Tracking your progressLearn how to track your investing progress and see how you're doing.
    • Understanding riskHaving a plan can make it easier to make the right investing decisions for you.
    • Rules and regulationsRegulators protect investors in Canada by setting and enforcing securities rules.
    • Psychology of InvestingMake better financial decisions by learning about behavioural insights.
    • Community outreachOSC in the Community takes the OSC's mandate from Bay Street to Main Street.
    • AnnuitiesAnnuities are an investment that can generate a steady income in retirement.
    • BondsBonds are an investment that generate interest after a fixed period of time.
    • Crypto assetsCrypto assets are digital investments with different opportunities and risks.
    • ESG investingESG investing allows you to choose investments that align with your priorities.
    • ETFs (exchange-traded funds)These funds hold a collection of investments and are traded on a stock exchange.
    • GICs (Guaranteed investment certificates)GICs guarantee a specific rate of return over a short period of time.
    • Mutual funds & segregated fundsMutual funds pool multiple investments into a fund owned by many investors.
    • Pension & savings plansDifferent kinds of workplace pension plans provide retirement income.
    • Real estateBuying a home is a way to invest your money and diversify your portfolio.
    • StocksStocks give you equity in a company, and are traded on a stock exchange.
    • More complex investmentsComplex investments have potential for high reward, but also higher risk.
    • RDSPsPeople with disabilities can save with a Registered Disability Savings Plan
    • RESPsSave for your child's education with a Registered Education Savings Plan.
    • RRIFsYou open a Registered Retirement Income Fund with funds from your RRSP.
    • RRSPsA Registered Retirement Savings Plan grows your savings tax free until you retire.
    • TFSAsA Tax-Free Savings Account helps you save for any goal, tax free.
    • Bank accountsChequing and savings accounts can help you manage your short-term needs.
    • BudgetingA budget can help you manage your spending, saving, and plan for the unexpected.
    • Life eventsLearn about how your financial needs may change at different stages of life.
    • Managing debtDebt shouldn't get in the way of your saving and investing. Learn how to manage it.
    • Personal insurancePersonal insurance coverage can help protect you and your loved ones.
    • RetirementPlanning for retirement helps you determine how much to save and where.
    • Running a small businessImprove your financial knowledge for your business and your personal life.
    • Saving moneyKeep your financial goals on track by saving some money each month.
    • Understanding taxLearn more about how tax filing and tax deductions work.
    • Wills and estate planningPreparing a will and estate plan ensure your final wishes are taken care of.
    • Types of fraudLearn how to spot frauds and scams and what they look like.
    • Making a complaintKnow your options for making a complaint.
    • Reporting fraudIf you suspect you've been a victim of fraud, report it immediately.
    • Checking registrationAlways check the registration of anyone trying to give advice or sell investments.
    • Investor warnings and alerts
    • CalculatorsPractice calculating compound interest, savings, debt consolidation, and more.
    • Quizzes and toolsCheck your knowledge of scams, behavioural biases, and other financial tools.
    • WorksheetsTry our downloadable tools to help you plan and budget.
    • VideosOur videos show you the basics of investment types, frauds to watch for, and more.
    • Interactive investing charts
    • Research & reportsDelve into our research on Canadians' needs and habits in finances and investing.
    • Investing introductionVisit our multi-lingual site for information for those new to investing or new to Canada, or both.
    • Investor NewsStay informed about the latest investor initiatives, educational resources, topical issues, key dates, and investor warnings/alerts from the Ontario Securities Commission’s Investor Office.
    • Investing questionsOur Investing questions site offers clear, unbiased answers to your questions on investing, from a trusted source.
    • Investing fundamentalsThis site brings you on a visual journey of key investing concepts. No matter your age, income or goals, these eight fundamentals can help you make smarter investing decisions.
    • Investor officeVisit the Investor Office website to learn more about how we lead investor-focussed education and outreach, research, and policy initiatives at the Ontario Securities Commission.
    • Investment reportingThis site guides you through the steps to learn how your investments are doing. Then you'll know when to make changes in order to meet your goals.
    • Interviews

GetSmarterAboutMoney.ca

Français
When autocomplete results are available use up and down arrows to review and enter to go to the desired page. Touch device users, explore by touch or with swipe gestures.

Home / Investing insights / Research & reports / Financial Literacy: A Foundation of the Investor Experience

Investing Research

Financial Literacy: A Foundation of the Investor Experience

3 min read

Share

  • Share to Twitter
  • Share to Facebook
  • Share to LinkedIn
  • Share to Reddit
  • Share via Email

View this page as a printable PDF.

November 28, 2019 – As more responsibility for investing shifts to individuals, it is essential that they have enough financial knowledge to effectively participate in Ontario’s capital marketsCapital markets Where people buy and sell investments.+ read full definition. The OSCOSC See Ontario Securities Commission.+ read full definition is actively involved in providing investor education resources to help investors achieve improved financial outcomes.

There are significant differences in the level of financial literacy among investors. The OSC Investor Office commissioned a survey of 2,000 Canadians to learn more about the different levels of financial knowledge and investor experiences in Canada.

Achieving progress in increasing financial literacy may be key to strengthening investor protection and experiences. Investors with a greater level of understanding of financial concepts are better able to make informed investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition decisions and avoid fraud.

Knowledge of Financial Matters

When asked to rate their overall knowledge of financial matters, 51% of respondents thought that they were about average. Their actual knowledge was then measured using a six question quiz. These questions covered risk, inflationInflation A rise in the cost of goods and services over a set period of time.…+ read full definition, compoundingCompounding A way to grow your money faster. Instead of spending the money you make investing,…+ read full definition, diversificationDiversification A way of spreading investment risk by by choosing a mix of investments. The idea…+ read full definition, numeracy, and bondBond A kind of loan you make to the government or a company. They use the…+ read full definition prices. This graph shows the percentage of respondents that answered each question correctly. The questions about bond prices and evaluating risk proved to be the most challenging for respondents.

The results reveal that there are substantial differences in the level of financial literacy among Canadian investors. Only 18% of respondents had low knowledge and the majority answered half or more of the questions correctly. Only 7% of respondents were able to answer all six questions correctly.

Perceived Level of Financial Knowledge

Comparing how respondents rated their financial knowledge to their test results revealed that many investors do not know how financially literate they are. 29% of investors may be underconfident because their level of financial literacy is actually higher than they think. This may cause individuals to be overly conservative in their investing.  A more significant problem is that 24% of investors may be overconfident. They think they know more than they do. This may cause them to take unnecessary investing risks and make bad decisions with their money.

The Investor Experience

Financial literacy is an important part of the investor experience. 72% of the respondents were satisfied with their experiences investing in Canada.
The survey showed there is a relationship between investor satisfaction and their level of financial knowledge. Respondents with low financial knowledge (scoring less than 50% on the financial knowledge questions) were more likely to be unsatisfied with their experiences than those with high knowledge (scoring above 80%).

Improving the investor experience is a priority for the Investor Office and the OSC. This survey demonstrates that Canadians with high financial literacy are more satisfied with their experiences as investors. The OSC will use the data from this survey to develop new and innovative ways to deliver investor education and support retail investors in today’s complex investing environment.

About the Survey: The OSC Investor Office engaged Leger Marketing Inc. to conduct a survey to help us understand the level of financial literacy among Canadian investors and how this knowledge effects their experiences as investors. The survey was conducted online among a representative sample of 2,000 Canadians, 18 years of age or older, between October 29 and November 4, 2019. The sample has been weighted down to n=2,000 by age, gender and region using the latest Statistics Canada census data to reflect the actual demographic composition of the adult population 18 years of age or older residing in Canada. These preliminary findings are part of a broader research study that the OSC Investor Office will publish at a future date.

Last updated September 14, 2023

Articles in this section

Articles read
Gamification & other behavioural techniques 3 min read
Canadian attitudes about crypto 4 min read
Assessing Canadian investor knowledge 4 min read
Self-Directed Investors: Insights and Experiences 2 min read
Investing and the COVID_19 Experience 3 min read
Protecting Aging Investors through Behavioural Insights 3 min read
The Investor Experience 2020 2 min read
Financial Literacy: A Foundation of the Investor Experience 3 min read
Improving Fee Disclosure through Behavioural Insights 5 min read
Encouraging Retirement Planning through Behavioural Insights 5 min read
National Investor Research Study 3 min read
Getting Started: Human-Centred Solutions to Engage Ontario Millenials in Investing 6 min read
Taking Caution: Financial Consumers and the Cryptoasset Sector 4 min read
MISSING OUT: Millenials and the Market 9 min read
MISSING OUT: Report and Resources 2 min read
Investing as we age 4 min read
Behavioural insights: key concepts, applications, and regulatory considerations 4 min read
IOSCO C8 Report on Senior Investor Vulnerability 4 min read
Retirement Readiness: Canadians 50+ 3 min read
Investor risk, behaviour and beliefs 2 min read
Financial Life Stages of Older Canadians 2 min read
Home equity as a source of retirement income survey 2 min read
Omnibus poll: Canadians' obstacles to saving and investing 2 min read
Benchmarking financial knowledge survey 3 min read
Omnibus poll: Canadian budgeting, saving and investing behaviour 2 min read
Investor Office Activity Report 2015-2016 1 min read

Post navigation

Back To:
Previous: The Investor Experience 2020
2 min read
Up Next:
Next: Improving Fee Disclosure through Behavioural Insights
5 min read

Sign up for Investor News

Stay informed about the latest investor initiatives, educational resources and investor warnings and alerts.

Past issues
  • September 19, 2023
  • August 1, 2023
  • June 20, 2023

Connect with us

Facebook Twitter YouTube Instagram
  • About Us
  • Contact Us
  • Investor News
  • Media
  • Glossary
  • OSC in the community
  • OSC Website
  • Terms of use
  • Privacy Policy
  • Accessibility policy

Brought to you by the OSC Investor Office

This website is provided for informational purposes only and is not a source of official OSC policy or a substitute for legal or financial advice. We recommend that you consult with a qualified professional advisor before acting on any information appearing on this website. For details, please see our full Terms of Use and Privacy policy

© Ontario Securities Commission 2023

Go back to top