Seniors investing with high risk

Is it true that “seniors cannot afford to take any risks” when it comes to investing?

We often receive complaints from seniors about investments that have lost money, and some suggest that any high risk investments should have been considered unsuitable by their investment advisor. While a client’s age and life stage are very important when determining suitability, there are misconceptions about seniors’ common characteristics. In reality, every investor, regardless of their age, will have unique financial circumstances, goals and more importantly, ability and willingness to accept risk.

Seniors with limited ability to assume risk should stick to low-risk investments. Others may have the ability and willingness to assume higher risk, for them, higher risk investments make sense.

For seniors’ suitability complaints, the biggest challenge OBSI faces is establishing that the investor’s personal and financial circumstances as well as their understanding of their ability to accept financial risk were taken into consideration by their investment advisor. We also often investigate whether the structure, features and risks of the investment were adequately explained to the consumer.

1.   Do you understand how the investment works? 

If you find it difficult to understand how an investment works, or even how you’re making money through it, there is an opportunity to ask questions. Ensure all of your questions are answered before you take further steps. More importantly, ensure that you are comfortable with the risk level of your financial investment.

You can also try the OSC Investor Office’s online re: Investing tool for answers to many common investing questions.

2.   Are you verifying your financial decisions with another credible source? 

If you have doubts about the advice you are getting, seek a second opinion from a registered financial advisor, lawyer or accountant. You can contact your securities regulator to check if someone is registered by going to the CSA website.