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Protecting Canadian Investors From Fraud

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In recent years, the number of retail investors in the U.S. and Canada has exploded. In just the first half of 2022, retail investors put $1.3 billion into the U.S. stock market every single day.

It’s not hard to understand why more consumers are taking an interest in investing. New technologies like trading apps and robo-advisors have made investing a lot easier and more accessible to the average person. 

But it’s not just the stock market that’s drawing in more and more consumers. In the same time period, digital assets like cryptocurrencies and NFTs entered the zeitgeist, thanks in no small part to celebrity endorsements and viral marketing campaigns.  

Overall, the pandemic ushered in a huge movement towards day trading and amateur trading. There are pros and cons: while investing is an extremely important wealth-building mechanism, consumers may be at increased risk if they jump into it without adequate education. And most online investing resources are provided by organizations with an incentive to sell to consumers, like banks and FinTechs. 

Regulatory bodies like the Investor Office at the Ontario Securities Commission (OSC) exist to combat this problem. The OSC’s mandate is to ensure retail investors are protected from fraud and bad actors. One of their tools to do so is their library of accessible eLearning materials about investing and finance, such as, among others. 

GetSmarterAboutMoney is an invaluable resource. But as the catalog of resources grew over the years, the library had become a little difficult to navigate. OSC asked TDL to help design a new-and-improved user experience (UX) by developing evidence-based design recommendations for the website. 

Debiasing OSC’s information architecture

Our work was grounded in behavioral literature on how people learn and make financial decisions. One thing that’s clear from the research is that it’s not enough to just make information available to people. It also needs to be presented in a way that facilitates learning and minimizes cognitive bias. 

A cluttered interface, for example, can give rise to information overload, presenting readers with more information than they can properly process. Meanwhile, the lack of a clear user journey — where to start, what to do after completing a resource, and so on — may lead to choice paralysis. Either of these could derail somebody from learning before they have a chance to get started. 

The solutions we proposed for issues like these didn’t necessitate any major changes to OSC’s existing content. Instead, we recommended changes like structuring that content into courses, to chart a clear journey for users to follow.

Timing is everything

Another clear insight from the behavioral research: to have a real impact on investor decision-making, information needs to be presented at just the right moment. Personalization is key for delivering well-timed reminders right before key decision-making points. 

In our survey of Canadian retail investors, we identified a number of personas who stand to benefit from OSC’s resource library. They differed in their precise goals and their histories with investing, but all of them were actively planning for a specific goal, like saving for retirement. 

With that in mind, a single well-timed email could end up making a massive difference in someone’s finances. For example, if a user indicated when signing up for GetSmarterAboutMoney that they were planning to invest in a tax-sheltered account every year, they could receive a reminder message shortly before the contribution deadline. Low-cost interventions like this can ensure that users are actually able to put their newfound financial prowess to good use, closing the dreaded intention-action gap.

The journey to financial literacy

TDL’s recommendations will inform the OSC’s planned website redesign, to be launched in the near future. With fraud on the rise in Canada, there’s no better time to make financial education more accessible. Our insights will help ensure that millions of people are better protected — and empowered to make smart decisions for their futures.

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