Theresa Ebden: Protecting Investors at the OSC | Rational Reminder 396

0:08 This is the Rational Reminder podcast, a weekly reality check on sensible

0:11 investing and financial decision-making from two Canadians.

0:13 We're hosted by me, Benjamin Felix, chief investment officer,

0:16 and Dan Bordalotti, portfolio manager at PWL Capital.

0:22 Welcome to number 396.

0:24 getting closer and closer to that 400 episode milestone.

0:28 An arbitrary milestone that we have nothing special planned for.

0:31 That's right.

0:32 Yet, but we still have time.

0:35 Yeah.

0:35 Uh so today we welcomed Teresa Ebden who is the vice

0:41 president of the investor office at the Ontario Securities Commission.

0:45 Now, if that doesn't sound exciting, I want everyone to know that that Ross,

0:50 who listeners will know from uh our our year-end

0:54 episode where you got to hear Ross from One Digital,

0:58 who sits in on our episode recordings to make sure they are compliant.

1:01 As a compliance person,

1:02 Ross was on the edge of his seat for the whole discussion.

1:05 I think that's important to point out for for listeners.

1:09 Uh no, but we had a fantastic conversation with uh Teresa.

1:13 The Ontario Securities Commission is

1:16 a really interesting organization and Teresa

1:19 introduces a little bit about who they are and what they do.

1:22 Uh they're a securities regulator obviously in in Ontario.

1:27 uh but they do a lot of really really interesting work on research uh

1:32 in investor research and uh uh outreach education

1:39 uh and between those two things they've produced

1:40 just a tremendous amount of really really

1:43 high quality content both research really high quality

1:46 research papers uh but also retail investor focused

1:50 educational material through their their getsmarteraboutmoney.ca CA website,

1:54 which we talk about during the conversation,

1:57 and you'll hear me get excited about it because I

1:59 really do think it's a fantastic uh a fantastic website.

2:03 So, we we talked a little bit about who the OSC are and and what they do.

2:07 Uh we talked about some of their research on financers,

2:11 and I was interested to find out, Dan, that I am in fact a influencer.

2:14 I think you are too.

2:16 Well, I don't I feel honored to be have that label bestowed on me.

2:20 But uh and as we're going to talk about a little bit,

2:22 one of the uh uh hazards of being a influencer

2:26 is you are a target for fraud and um

2:30 yeah, so we're going to get into that a little bit,

2:32 share a little bit of a personal story that you had, Ben.

2:36 Yeah.

2:36 Yeah, that was a interesting interesting messages to get

2:40 from people that that I was being impersonated.

2:43 Anyway, so we talked about influencers and and just

2:45 the role that they're playing in retail

2:47 investing and how people are consuming the advice

2:49 and being influenced by the advice from influencers.

2:53 We talked about AI uh like the example you just mentioned, Dan,

2:56 and some of the other ways that it's being used about a lot about scams,

3:00 which I think Ross mentioned that's the one of the parts that he

3:02 really enjoyed from a from a compliance and sort of regulation perspective,

3:06 just how what can we do about

3:08 that in terms of investor education and and mitigations.

3:11 Then we talk about gamification which is one

3:13 that you know people think about scams as oh

3:15 yeah like you got scammed but gamification are

3:18 these more subtle nudges that can happen in investing apps.

3:22 So it's not illegal.

3:24 It's not breaking any any regulations or laws but there these little incentives

3:31 that can make you behave differently than

3:33 you would have otherwise inside of investing apps.

3:36 We've talked in the past about uh

3:39 options trading and individual stock trading and how

3:42 that gets gamified and promoted through apps and then

3:45 leads to you know not great investor outcomes.

3:48 Anyway, so we talked a little bit about that and how the OSC

3:51 is thinking about it and the research that they've done on it.

3:53 So that was that was pretty cool.

3:56 Yeah, it's interesting, you know, how how like I mean on the gamification point,

4:00 I mean there's all of these really sort

4:01 of wellestablished techniques that retail stores and casinos

4:06 and even restaurants and things like that use to get you to spend more money,

4:11 stay longer, spend more.

4:14 And this has become a feature of investing platforms now as well too.

4:18 And you know, it's one thing to stay a little longer and order two desserts.

4:23 It's another thing to, you know, just sort of be subtly nudged into really um,

4:29 you know, dangerous long-term investor behavior.

4:31 And I think as we we're going to talk about here,

4:34 uh, a lot of these nudges just encourage people to trade more,

4:39 transact, and all of that is associated with poorer outcomes over the long term.

4:46 Yeah.

4:46 And more profits for the institutions those behaviors.

4:50 That's the that's the real rub.

4:53 Uh okay so Teresa is a strategic leader with more than 25 years of experience

4:58 in marketing communications and financial journalism.

5:02 She was previously at Accenture where she helped lead the creation

5:05 and roll out of major global programs including client value measurement

5:09 the global coid9 client response and she also had leadership roles

5:13 on pro bono client initiatives in the sustainability and nonprofit industries.

5:17 Very interesting background.

5:19 Uh during her journalism career, she was at Bloomberg News, the Globe Mail,

5:23 and BNN, and she covered financial markets and interviewed global leaders.

5:28 She's got an MBA from the Ivy

5:30 Business School at the University of Western Ontario.

5:32 She was a gold medalist there, and that that's like one of the top,

5:35 if not the top business school in Canada.

5:39 Uh she's also got a journalism degree from Toronto Metropolitan University.

5:43 and she mentors MBA students and sits on several nonprofit ords.

5:49 Really interesting person and really interesting perspectives

5:53 from where she sits at the OSC, which is a regulatory body, but her office,

5:58 the investor office,

5:58 is really focused on the experience of investors in Ontario specifically,

6:04 but I think it's it's applicable to any investor.

6:07 Um, anything else, Dan?

6:09 No, let's get to the interview.

6:11 All right, let's go.

6:15 Terresa Eban, welcome to the Irrational Reminder podcast.

6:19 Thanks for having me.

6:20 Great to be here.

6:22 Excited to be talking to you.

6:23 So to to give our listeners some background,

6:25 can you describe what the Ontario Securities Commission is?

6:29 Absolutely.

6:29 Um so the OCE is an independent crown agency.

6:33 We regulate Ontario's capital markets.

6:36 We make rules that have the force of law and uh

6:39 by adopting policies that influence

6:41 the behavior of capital markets participants.

6:44 Um our mandate is to provide uh protection to investors from unfair,

6:50 improper or fraudulent practices.

6:53 Uh also to foster fair, efficient and competitive capital markets and confidence

6:58 in capital markets and to foster capital formation

7:03 and to contribute to the sta stability of the overall

7:07 financial system and the reduction of systemic risk.

7:12 Important stuff.

7:14 And what does the OSC investor office do?

7:17 Yes, so the investor office um it

7:19 has to do with providing protection to investors.

7:22 It's a key part of our mandate as you heard.

7:24 So, uh, we work to protect investors.

7:26 We make and enforce the rules.

7:28 Of course, the investor office leads the, uh,

7:31 efforts of the OC to identify and address investor issues and concerns.

7:35 Um, and so I have uh, three main work streams in the investor office.

7:41 Uh, I have a policy advisory team.

7:44 So, that's a team of lawyers and they work on investor-f facing policy.

7:48 So there is um something we refer to as the uh OBSI or binding authority project

7:55 which has to do with uh pursuing binding

7:58 authority for recommendations by OBSI for investor redress.

8:03 Uh so what does that mean?

8:04 You know, if you've had an advisor who has put you in something that is way out

8:09 of your league and you didn't realize it and you

8:11 know perhaps you you need to make a complaint, the complaint goes to OBSI.

8:16 uh currently that is not binding meaning

8:19 um it's a recommendation uh but the ideas

8:23 after this initiative it would be and so it's an initiative uh that's

8:27 being worked on right across Canada with the CSA another example of policy

8:32 that this team works on is um the vulnerable investors project so this came out

8:37 of a huge push that we did with our seniors advisory council um

8:43 and that was a few years ago that that started started up and the idea

8:47 was to take lots of advice and make sure that we were embedding the needs

8:51 of seniors um and other vulnerable investors

8:55 uh into uh our day-to-day regulatory activities.

8:59 So out of that came some tools like the trusted contact

9:03 person initiative um which you may have heard of uh and then

9:07 of course they help me with our international collaboration um across

9:12 with the OECD and uh international organization of securities uh commissions.

9:17 Uh so that's a very active uh helpful team uh in the investor office.

9:21 Then we also have education and outreach.

9:24 They handle um all of our uh

9:27 education and outreach uh plat platforms and projects.

9:31 So getsmarteraboutmoney.ca, all of our social media channels,

9:35 there's a a major effort to make sure that uh

9:39 we're educating investors about um uh everything in the financial literacy

9:46 basket because we know that that is what helps inoculate

9:49 against fraud and help people have a better experience as investors.

9:53 Um, and then finally, uh, there's the inquiries and contact center.

9:57 Uh, so they take calls from the public.

9:59 Um, and we process about, uh, I think it's 10,000 cases a year.

10:06 Um, and so we'll have market participants call in as well.

10:09 And then across that, I've got a group working on investor experience, uh,

10:13 and the segmentation of investors and understanding, uh,

10:16 their behaviors, working with our behavioral insights group.

10:19 So, uh, that's a little bit about what we do in the investor office.

10:22 All working together to just basically make our capital markets more inviting,

10:27 thriving, and secure.

10:28 Holy smokes, it's a lot a lot.

10:30 There's a lot going on.

10:32 I love it.

10:33 It's great.

10:34 Yeah.

10:35 Uh, how does the investor office identify which issues to focus on?

10:39 Like you mentioned the trusted contact person and that which

10:41 we've talked about in this podcast a bunch of times,

10:43 but how does how do you guys decide this is the priority?

10:47 Absolutely.

10:47 That's a great question and um it's you know

10:51 there are many different ways that we do that.

10:52 Now we do have an expert investor advisory panel.

10:56 Uh we work very closely with uh they meet monthly and uh so that has to do

11:02 with all of the different sort of policy

11:03 initiatives that may be coming down the pipe.

11:05 We sort of uh share information in terms of different education initiatives.

11:10 Um we also work very closely within the OSC.

11:15 Um so we have uh within the strategic regulation group

11:19 that I sit we've got an innovation office we have an area

11:23 that deals with thought leadership and behavioral insights um horizon

11:27 scanning for issues um our chief economists we've got a lot

11:31 that we work in there and then of we have

11:34 sort of all of the different um uh meetings that will

11:37 happen across the commission enforcement corporate finance all of these groups

11:42 to make sure we have our ears to the ground.

11:44 Um there's also a lot of international

11:47 collaboration uh with regulators through committee

11:50 8 in the international organization of securities

11:53 commissions uh 38 different regulators on that.

11:56 Um we meet a few times a year and uh have

12:00 some different initiatives uh that we work on um and share

12:04 information about sort of global phenomena including frauds and scams

12:08 um and how best to address uh address that with investors.

12:11 Um and then um our contact center uh at the OC that I mentioned earlier,

12:17 it's our first point of contact for many investors.

12:20 Uh we collect data from the calls that we receive there,

12:23 obviously protecting the privacy of those individuals,

12:25 but making sure any key issues are uh understood and elevated.

12:31 We work uh very closely with our behavioral

12:34 insights team and thought leadership as well.

12:36 So um really if you want to identify major issues affecting investors,

12:42 you have to understand what motivates them and how they're thinking.

12:46 Um so that is an important team as well.

12:49 Um and then of course last but definitely not least

12:52 there's a lot of collaboration

12:54 nationally with the Canadian Securities Administrators.

12:57 Um so that's the blanket organization for um uh securities regulators in Canada.

13:03 Um so my team works uh across a couple

13:07 of different CA CSA groups on different initiatives.

13:11 Um I mentioned the binding authority

13:13 project but also the investor education committee.

13:16 They also uh meet very regularly

13:19 and uh and share information on different campaigns

13:22 and then have campaigns that they'll put out um as well to educate investors.

13:27 So there's a lot of different ways that we we

13:30 come at it when we're identifying the issues affecting investors today.

13:36 Now Teresa, you mentioned that you get I

13:38 think you said 10,000 or so inquiries annually.

13:42 Um what's the nature of those questions?

13:45 Is it primarily people who are

13:47 have complaints about investments that they've been

13:50 put in by adviserss or are they focused more on fraud and other

13:55 sorts of things that don't have anything necessarily to do with you know

13:59 the financial industry per se or is a mix of all of those things.

14:03 You know we get everything.

14:05 Um sometimes uh this is a contact center rather than a a call center.

14:10 So they are actually taking on cases,

14:12 handling uh different issues that people may have.

14:16 I would say 75% of that are Margaret participants with uh queries um

14:22 that can be anything to do with quarterly filings or what have you.

14:25 Um so it's a mix of skills on the team.

14:28 Um so uh there are lawyers, parallegals,

14:33 different people who come from different um sort of areas of experience.

14:38 Um enforcement uh some former enforcement people worked in there as well.

14:43 So and that is helpful for the investor calls.

14:47 A fairly large portion of the calls are actually fraud related.

14:52 So people calling in and saying you know I invested in this crypto uh investment

14:59 couple of years ago I've put in this much now I'm not hearing from them

15:03 or I have hired um you know recovery services which is what we call the recovery

15:09 room scam where they come back at you um trying to get your money back.

15:13 Um and so we get a lot of questions about that which you

15:18 know we sort of help them understand you know whether or not if

15:22 the individual was registered uh whether

15:25 this is a legitimate organization and then

15:28 sometimes you'll get investors calling and not

15:30 quite understanding what they've invested in.

15:33 Um so if you have bought crypto for example

15:37 and you maybe don't understand how it works, what a wallet is etc etc.

15:41 it's just helping them as well.

15:43 Um, so there's different uh different areas but you know also if

15:49 you have to make a complaint or seek help after a loss

15:52 or if there has been a disgorgement order uh by um our capital

15:57 markets tribunal uh people uh will call in there with inquiries about that.

16:02 We'll take calls on anything uh to help

16:05 uh the people um understand um their investments.

16:11 Wow.

16:11 It's an incredible service and then that and free.

16:16 Yeah.

16:17 And then those data flow into priorities like strategic priorities for the OSE.

16:23 Uh yes absolutely.

16:25 So um I mean the data I'll talk about

16:29 that first with um the increase in contact center.

16:33 Um so obviously there's a whole CRM that goes into and we um

16:38 we do distill different issues uh that we find and share we meet weekly

16:43 sort of the I have a team of managers across different divisions and share

16:48 um any kind of trends we're noticing or major initiatives on the way.

16:51 Um, and so for example, um,

16:54 I'll use the example of the recovery room scam that I talked about earlier.

16:58 So if you know someone who's been defrauded,

17:02 likely they've also received a follow-up call.

17:05 We're seeing this more and more where uh an organization has said, "Oh,

17:10 I um I represent um uh a service that can

17:15 help you get your money back or I'm investigating this.

17:18 I can help you." And you know, it can be anything.

17:21 I mean, they'll say anything to get your money, but you know,

17:23 a common one is just open up this wallet, put $25,000 in it,

17:27 which is a minimum amount that you need to have in there,

17:30 and then we'll dump all the money back in there.

17:32 That's a very common one.

17:33 Um, so that's the recovery room scam.

17:36 When the contact center was getting a lot of those, we

17:41 uh started with an example of what a call sounds like,

17:46 um, uh, like what the key points are.

17:48 Then we moved into um the education and outreach

17:52 team and walked the wider branch through the materials

17:56 that we have to educate people on frauds

17:59 and scams and this particular type of fraud and scam.

18:02 And then we brought in the policy team that had sort

18:04 of the different uh policy initiatives that we could uh speak

18:08 to that would help maybe slow down uh some of the impacts

18:13 of um these fraudsters attempts like the trusted contact person.

18:17 just helping everyone understand the end to end

18:20 work that happens across the investor office.

18:23 It kind of um encourages that connective tissue and gets

18:26 the team working together in new ways just even that lunchroom

18:30 conversation ideas moving through uh just to kind of get

18:34 creative and how we can um really drive the content forward.

18:40 Now, speaking about the education mandate,

18:42 can you tell us a little bit about the get smarter aboutmoney

18:45 site and who's the audience and who's creating the content for that site?

18:51 Well, it's us.

18:52 Um, so getsmarteraboutmoney.ca.

18:55 Um, it's our investorf facing site and it's

18:58 actually one of Canada's most visited financial education websites.

19:02 Um, it's won a few awards and there were

19:05 almost 5 million visits to the site last year.

19:08 Um, so we've got a whole raft of uh content uh uh different games,

19:16 tools, um plain language articles, resources,

19:20 and it really takes a broader scope

19:23 because when you talk to someone about investing,

19:26 they're also thinking about their money.

19:28 So, it's really financial literacy as well.

19:30 Um, and so we work with different partners on the content as well.

19:34 It's written by the team and um we'll refresh articles

19:39 as we go over time as well and keep it fresh.

19:42 But it's anything from budgeting to investing, retirement.

19:46 Um uh it's a place where you can go and learn about

19:50 the different kinds of frauds and scams as well and how to avoid them.

19:54 Um the most popular item on it is the compound interest calculator.

19:59 Hands down.

20:00 Um, we have uh investing academy on there as well.

20:04 This is a suite of just free open online courses.

20:08 Uh, they're designed to help people

20:09 learn the fundamentals of how investing works.

20:12 Um, and it's uh we're making it available

20:16 to as many people in Ontario as possible.

20:19 So, we provide services uh in or the information in 23

20:24 languages um to help people make more informed uh investment decisions.

20:31 Um speaking of languages, um we also have an OSC in the community

20:37 program and uh that falls under our outreach area.

20:41 Um, and so we have staff who will go around to different communities,

20:47 uh, seniors homes, new Canadian centers, anywhere,

20:50 uh, that, uh, makes a request, uh,

20:52 gets in our queue and we speak with investors,

20:56 um, including newcomers and multicultural groups,

20:58 and we deliver these presentations on fraud prevention,

21:02 investing 101, and the client advisor relationship.

21:05 And we encourage um internally uh anyone within

21:09 the OSC who'd like to uh come out

21:12 and speak uh to to do so although we do have a team who handles that as well.

21:17 But um more broadly uh lots of uh get smarter about money social media channels.

21:25 We are actually um on quite a few uh because

21:29 you recognizing that people get their information from many different sources.

21:34 So you can go to YouTube uh or uh you know Facebook, Instagram uh we're on X,

21:41 Pinterest, Blue Sky and um recently Reddit uh which

21:47 is proving to be uh pretty popular as well.

21:50 So in all when you sum it all up that is uh

21:54 adds up to 17 million visitors uh to our resources last year.

22:01 It's crazy.

22:02 It's really good content.

22:03 Uh I I frequently I'll frequently use

22:07 screen captures of different parts of that website.

22:10 If I'm talking about a concept in one of my videos, I'll show

22:14 just that description the way that that the getsmartermoney.ca

22:17 website has described it because I find that it's

22:18 there just such uh concise plain language explanations of you

22:23 know basic and sometimes not so basic financial concepts.

22:26 So it's it really is good content.

22:28 Oh, thanks.

22:29 I really appreciate I think I really encourage

22:31 the team and they're so creative to just, you know, do different things.

22:35 So, they've been having a bit of fun

22:36 on Instagram and also playing around with our mascot.

22:39 That little owl you see, the owl's name is Oscar.

22:43 Um, so they've been

22:46 Yes.

22:47 Um, so we do have a great team um, uh, right across there and and uh,

22:53 they'll work with everyone right across the commission that they need

22:56 to to get that information and everyone understands how important it is.

23:00 So the way it's a culmination of the the body of knowledge that people

23:04 in the OC have in order to to help the people of Ontario and beyond um,

23:10 whoever wants to access it.

23:11 um and uh of course informed by what comes in from the contact center,

23:16 our advisory panel and all of that.

23:19 We we have a section too with articles about the latest research at the OSC.

23:24 We have a very robust uh research group.

23:27 Um and there's a very cool section on the psychology of investing.

23:32 So, our behavioral science experts have uh designed articles to help

23:37 people more aware of the biases that may impact their financial decision-making.

23:41 Um, there is a behavioral bias checker uh which you I don't know,

23:46 have you used that one?

23:48 No, not that one specifically.

23:50 Okay, that that's a neat one.

23:51 It helps you sort of identify any bias that you may have.

23:54 Um, and we all have them, right?

23:55 We all come to the table with different biases.

23:58 Um, and so it takes people through

24:00 a series of questions and scenarios to identify,

24:03 you know, which biases they may be most

24:05 susceptible to when it comes to financial behavior.

24:12 Yeah, it's very very cool.

24:13 It's a great resource.

24:14 Um, so we've talked about a lot of a lot of different things

24:18 and a lot of the ways that the OC is figuring out what the priorities are.

24:21 Can you talk about what the major retail

24:24 investors that the OC is watching are today?

24:28 Yes, absolutely.

24:29 Um, you know, I would say first the rising risk from AI enhanced scams.

24:37 You know, we're going into March.

24:38 It's fraud prevention month.

24:40 Uh, that'll be happening soon.

24:42 And then so scams using AI such as deep fake voices.

24:47 Um, you know, maybe it's uh certain political leaders

24:51 of you feel is is encouraging you to buy crypto.

24:54 was a very common one,

24:55 the very common deep fake um or more convincing um fishing schemes.

25:01 They can pose very high risks, much higher than traditional fraud.

25:05 Um it they're going after your savings and often these are very large sums.

25:10 It is not out of the realm of normaly for us to get

25:15 calls from people who have had millions taken over years from these.

25:21 Um so that that is I would say right now one of the main retail investor issues.

25:28 Um the growing influence of influencers because um

25:32 you know technology given technology take it away.

25:35 Uh I'm a major technology advocate.

25:38 I think that it's you know when used uh for good uh can do a lot of good.

25:43 It's a great magnifier.

25:45 Um, and as people go into uh social media platforms looking for answers,

25:50 it's given rise to what we call the fin influencer,

25:53 which I'm sure you're very familiar with.

25:55 Um, we have some recent research that shows that financial

25:59 influencers on social media can significantly sway in retail investor decisions.

26:04 Sometimes leads people to unsuitable or risky choices.

26:08 You know, I I saw this video on YouTube.

26:10 This guy sounded like he knew what he was talking about.

26:13 is recommending this and you may or may not realize that person

26:16 may or may not be uh paid to say what they're saying.

26:19 Uh they may or may not be qualified to say what they're saying.

26:22 And so there's a lot of it.

26:24 There are good influencers out there.

26:26 Uh and they do a great service.

26:28 Uh there are also uh some bad actors out there

26:30 and then there's sort of a middle ground where um you know

26:34 perhaps you just need to kind of go out and uh

26:37 and get a few different viewpoints before you make your decisions.

26:42 Um and I would say that uh misleading online

26:47 design um like sometimes called dark patterns um trading platforms

26:54 that use subtle digital design tricks that push investors towards

26:59 certain choices which may not always align with their best interests.

27:03 And this is not unique to our industry at all.

27:06 I mean, anyone who's played a game online or even used Dolingo,

27:10 which is super addictive and uh and fun.

27:15 Um these same things like collecting points um you

27:19 know uh giving you sort of different pushes daily,

27:23 rewarding you for frequent behavior that can

27:26 happen with um trading platforms as well.

27:30 And it's not necessarily to the benefit of your long-term financial health.

27:35 Um so uh the m misleading online design and the gamification on trading apps

27:43 uh like badges and rewards and prompts

27:45 that nudge investors towards more trading or risk-taking.

27:49 Um these are some of the retail investor issues I look at.

27:53 Um I mentioned cryptoreated risks and fraud.

27:57 Um, and you know, I I think that uh just in general

28:03 there is an a rising level of complaints coming from do-it-yourself investors.

28:10 Um, and so we've highlighted some

28:13 of those issues in including uh confusion around

28:17 um increasingly complex products um losses tied

28:22 to volatility and challenges around using online platforms.

28:26 So those are some of the major things I would say occupy uh the team today.

28:32 Okay, that's perfect.

28:33 We have we have a whole bunch of questions on each of those things because

28:36 there were uh research papers on the OSC site that we based our questions on.

28:41 So that's uh that's good.

28:43 Uh I I do want to jump into questions on influencers,

28:46 but I I want to ask you about the AI stuff.

28:49 So, I I've had twice in the last few weeks

28:52 sent to me uh screenshots of ads that are showing up

28:57 on my YouTube videos that are an AI version of me

29:02 trying to entice people to participate in some kind of scam.

29:05 And oh goodness.

29:05 Okay.

29:06 I think because my viewers tend to be

29:08 relatively sort of sophisticated or knowledgeable or skeptical,

29:13 um they've hopefully not been caught it,

29:15 but they've sent they've sent like, "Hey, Ben, just confirming this isn't you.

29:17 I'm pretty sure this is a scam.

29:19 What should I be doing about that?

29:23 Oh my goodness.

29:23 Well, first of all, you should absolutely report it.

29:26 Um, you know, you first report it to the police.

29:31 Someone's impersonating you.

29:32 I mean, that that is right there.

29:33 Our cause is to call, you know, your local police.

29:36 Um, the um uh Canadian Anti-fraud Center needs to know about that.

29:42 They collect data on this and you can call our contact center as well.

29:47 um inquiries at osc.ca if you just prefer to send an email.

29:52 Um we do hear of this a lot.

29:55 I mean I'm sorry this happened to you.

29:57 This this is must feel like such a violation.

30:01 Um particularly as you work to build up, you know, a good brand.

30:05 Um and to have someone do

30:06 that, it's cold comfort that they impersonate everyone.

30:10 They even impersonate us.

30:12 um crazy

30:14 just a warning out about the the CSA impersonation scam uh uh a few weeks ago.

30:20 So um you know major economists,

30:24 politicians um I mean as you know my uh managers

30:29 in the contact center say they'll do anything to get your money.

30:34 Um so yes, you absolutely should report that.

30:38 Yeah.

30:38 Okay.

30:39 That's good good feedback.

30:40 Scary stuff for sure.

30:41 I and I feel bad like I hope

30:43 I hope people aren't getting scammed with my likeness

30:46 but it's you know I I feel pretty helpless

30:49 because the uh the platforms don't do much about it.

30:56 Yeah.

30:56 I mean it it definitely needs to be reported.

30:59 Sure.

30:59 And you know, I think that um we're seeing that uh with these it's

31:07 the convergence of technology coming together for bad purposes.

31:13 You can use technology to fight it.

31:16 Um, but what we're seeing in terms of investor scams is,

31:22 you know, the traditional scam that would have happened before,

31:25 like when I first worked at the OSC, you know, back in 2009 to 2011,

31:29 you know, there's boiler room scams were big, you know, the the

31:33 they called them that because it's just basically like people

31:36 mousing like working the phones and trying to scam people.

31:40 But AI makes it even faster at scale.

31:44 Um, you know, you can you have these uh frequent messages.

31:49 They're very polished.

31:50 They're very convincing.

31:52 Um, the deep fakes, the voice cloning,

31:56 the fake endorsements, you know, bots that will, you know,

32:01 build entire social media strategies, sites, um,

32:07 and then, you know, exploiting interest in AI itself.

32:13 So scammers will promote fake or misleading

32:16 AI powered investment opportunities like quantum AI

32:20 and capitalizing on the hype uh

32:22 and limited understanding of the technology as well.

32:27 Um you know you talked a little bit about tape fakes

32:30 and voice cloning um the grandparent and emergency scams as well.

32:36 Um not so much tied to investments but will take your investment for sure.

32:41 um where you know you get that phone call from uh

32:45 your grandchild or you know vulnerable family member and they say

32:50 you know maybe they've been in a car accident um you

32:53 know the other guy has a nose bleed you need money

32:55 to get out for bails they're going to send someone over

32:58 to pick it up in an envelope and I mean the what

33:01 we've noticed lately is the local pickup of the money rather

33:05 than dropping it off in machine or what have wiring it

33:09 making it virtually impossible to trace.

33:12 Um but yeah, this happened to friends of mine actually and um they do

33:18 pick people in vulnerable moments like they

33:21 have been known to scan obituaries and

33:25 like they are it it is a lot of a world of out there with that.

33:29 But um one way to fix that or inoculate your family is I

33:36 don't know if your parents had this for you when you were a kid.

33:39 They had it for me.

33:40 There was a password.

33:41 Like if say they were going to send someone to pick me up from school,

33:43 there was a password which I'm not going to say here or anywhere.

33:48 And um now my parents will remember that password.

33:52 And so I tell them that is your password.

33:55 And if you ever think you get a call from me, that's what the password is.

34:01 Wow.

34:00 And um you know if you can't call me back or reach me, don't do anything.

34:06 And you have that family safe word.

34:09 Yeah, and that should help.

34:12 Yeah, that seems like the next step after the the trusted contact person.

34:15 And we've talked about internally doing something

34:17 like that for all of our clients.

34:19 Administering that is a little tricky.

34:21 We have to figure out how to do that, but it's

34:22 it's inevitable because when you can be impersonated perfectly with AI,

34:26 it's it's just really it's really scary.

34:29 Um, right.

34:30 I mean, the thing with the trusted contact person, you self- select that.

34:34 So you um you the investor have

34:38 the control to appoint your trusted contact person, right?

34:41 And so should you uh you know should your advisor

34:45 or your financial uh uh provider think something may be a miss

34:50 or you hit a point in time where maybe you've had

34:53 an accident or you've had or some other reason for cognitive decline.

34:58 um if unusual activity is happening on the account,

35:02 it just gives the uh the organization the the ability to call someone and say,

35:09 "We've noticed these things and slow it down a bit." Yeah,

35:14 in a nutshell, that's oversimplifying it, but yes, it's absolutely and you know,

35:17 we're finding that um you know,

35:19 people do sign up for it when they're made aware of it.

35:22 Uh and there just need to be more education on it and um even younger people.

35:27 Yeah.

35:28 That makes sense.

35:29 Uh, you mentioned you you alluded to influencers earlier.

35:32 Can you can you describe what a influencer is?

35:37 Absolutely.

35:37 Well, in a way, you could almost say that you are a fin influencer, right?

35:41 A influencer.

35:42 And it's not a bad thing at all.

35:43 It's a good thing.

35:44 Um, I've been I've been wondering I've been wondering if I was a influencer.

35:49 Well, um, you are an influencer uh in the financial realm.

35:54 uh you're an online personality who offers advice,

35:57 tips or guidance on how to manage money,

35:59 invest wisely or achieve financial goals.

36:02 So influencers generally do fall into one of three categories.

36:07 So there are unregistered individuals,

36:10 unregistered individuals hired by financial firms

36:13 and registered investment advice professionals, the latter one.

36:17 Um, and so, um, while some influencers may

36:22 offer quality advice or guidance, others may have.

36:26 Like, you really don't know until you check it out.

36:28 It's not always immediately available or available at all,

36:30 but you don't know if they have a contract

36:33 with the organization they're recommending

36:35 or the type of investment they're recommending.

36:38 Um, there might be questionable credentials.

36:42 Um and so uh you know you you don't always know what

36:48 you're getting and so um investors

36:52 don't always trust social media financial advice.

36:57 Um they are more willing to trust specific influencers

37:01 with whom they feel they've developed a trustbased relationship.

37:07 Yeah.

37:07 Let's talk a little bit about that trust because

37:10 um it's interesting to uh get a sense kind

37:14 of of how just how trusting people are of advice

37:18 that they're getting online from people they don't know.

37:21 They don't necessarily understand their background.

37:24 So, you know, how seriously are retail investors

37:27 taking this kind of advice that they get online?

37:32 Um I would say in our research about a third so 35%

37:36 of respondents reported making a financial decision

37:38 based on advice from from a influencer

37:41 and about a quarter in experiments so 24% of those people exposed to influencer

37:48 style posts bought the promoted asset versus about 70% 7% who were not exposed.

37:56 So we can see that there is a significant influence there.

38:00 our behavioral insights team has has uh done work to sort of show those trends.

38:07 Do we know why people are getting their financial advice from from influencers?

38:13 I mean, I think it's just part and parcel of the movement of the times, right?

38:17 And where people get their information from.

38:19 I mean, the days of sort of being on the subway and seeing everyone reading

38:24 the newspaper and flipping on the news at six o'clock at night and, you know,

38:29 knowing a person um uh who could help them with that, that it's changed, right?

38:35 Our points of connection through the day are multiples of what they were before.

38:41 And so popular self-reported reasons um include the perceived

38:47 ease of access through those multitude of connections.

38:51 Uh simplicity, it doesn't cost anything, and it is often very informative.

38:58 Um social media posts can often feel more

39:01 concrete um and emotionally engaging than traditional financial information.

39:08 Um, and I think that does increase its persuasive power.

39:13 Um, if you know anyone who's sort of a big YouTube consumer,

39:18 like you can sort of almost watch it happen if it's

39:21 on a topic that you don't care about and see how

39:23 they dig in and they start to have their sort of favorite

39:27 people that they listen to on whatever topic it may be.

39:31 Um, but so the reality is influencer advice is convenient

39:36 and accessible and and that's why people are doing it.

39:40 So interesting.

39:41 Uh, is there a specific demographic group or or type

39:46 of person that's more likely than others to take influencer advice?

39:51 Yeah, we did some work on that as well.

39:53 Um so when exposed to finance related social media content um about a fifth

40:01 21% of investors bought the asset promoted

40:04 in a post compared to 29% of non-investors.

40:10 Um so that suggests non-investors are at an elevated

40:14 risk of being influenced by influencer content on social media.

40:18 So thinking back to that example of someone who you know may

40:21 see say an Instagram post um with uh you know a politician

40:28 promoting a crypto asset maybe they've never bought an investment

40:32 in their life they are more likely to uh go for that scam.

40:37 They are also more likely to listen to a influencer.

40:42 Um, and so of those who have

40:45 made financial decisions based on influencer advice,

40:49 they're also more likely to have been scammed on social

40:52 media to the tune of 12.2 times more likely.

40:57 Um, they um are more likely to trust the financial influencers that they follow.

41:03 Uh, 7.2 times more likely.

41:06 um they are uh nearly five times more

41:09 likely to trade stocks or other investments frequently,

41:14 several times a week is how we define frequently.

41:17 And they're nearly four times more likely to believe

41:20 that the financial influencers they follow provide useful information.

41:25 Um some other interesting facts that it found um they are three times more

41:30 willing to take moderate risks um and accept

41:35 some losses to potentially earn higher returns.

41:38 Uh and they're twice as likely to have

41:41 experienced significant investment losses in the past.

41:45 That's a major one.

41:46 um they're also twice as likely to manage

41:50 their investments using a self-service mobile app.

41:54 And then so finally um of those who

41:56 have made financial decisions based on influencer

41:59 advice um they're also less likely to work

42:03 with a financial advisor or a portfolio manager.

42:07 in fact three times less likely and similarly roughly three times less

42:12 likely to spend less than an hour on social media per day.

42:16 So there are some pretty clear divisions there.

42:20 That's super interesting.

42:22 Um obviously we don't tell people that they shouldn't have financial advisors.

42:26 We try and be balanced, but you know we're we're a little biased.

42:28 Um, but I know that a lot of non-registered uh influencers,

42:34 I know this because I've seen some of their videos, they often sort of create

42:39 skepticism about traditional regulated financial advice.

42:43 Like they tell their followers, you shouldn't have an adviser,

42:45 you should do this thing or buy this product or whatever.

42:49 So, it's interesting to hear that there is that that relationship in the data.

42:53 Yeah, there's I mean there's really you can walk

42:56 through different industries and see this you know everything

42:59 from health advice to you know sort of um how

43:04 you organize your day and and finance is no exception.

43:08 It's just uh you know the consequences if uh

43:12 you sort of do fall in with a influencer

43:16 who's know got your best interests in mind

43:19 the con consequences can be uh quite dire.

43:24 So how should consumers who are you know listening

43:27 and viewing this financial content separate the good from the bad?

43:31 What are some of the criteria that you can work through?

43:33 Is it production quality?

43:35 Is it trying to figure out who the source is,

43:38 what some advice you can offer to people to help,

43:41 you know, separate the wheat from the chaff there?

43:44 Yes.

43:44 Well, fortunately, and that's a great question,

43:46 and as you know, to become qualified to give financial advice,

43:50 it's you actually have to uh do a lot of studying,

43:54 a lot of credentials, and when you get those credentials,

43:57 you become uh registered, qualified.

44:00 Uh and um so going to check before

44:04 youinvest.ca uh which is another service uh we provide.

44:09 Go there.

44:10 If your person's there, it means they're registered.

44:14 So at least they do have the qualifications.

44:16 Um that's good to know.

44:18 And then you also want to sort of be digging around uh their site

44:23 or their profile and seeing if they

44:26 disclose any conflicts of interest or compensation.

44:29 They may not.

44:31 Um but that's something to look for.

44:32 And then as with anything in life,

44:35 like just be very cautious of highly emotional language.

44:39 If they're creating a sense of urgency, promises of easy returns.

44:45 These are very common persuasion techniques.

44:48 Um, if you've ever seen the movie The Beekeeper, um, uh,

44:52 that that there's a scene there where a woman um is having her, uh,

44:59 computer sort of compromised, uh,

45:01 and there's some sort of a a ransomware situation and the, you know,

45:08 the choices are made that are unfortunate,

45:10 but, you know, the the emotional language, the urgency, um,

45:14 all of that, that's that's commonly used with um bad advice.

45:19 It's also commonly used with fraudsters.

45:22 So, this is emotional manipulation is always something to be very careful of.

45:29 So, something that seems kind of tricky is

45:31 that like we Dan and I are are registered.

45:34 We have our licenses to give financial advice.

45:38 And so, if we said the wrong thing, there would be repercussions.

45:42 But a lot of the people who are giving maybe

45:44 the type of advice that should be should be uh

45:48 should should have some oversight are not registered and so

45:52 it's seems like it'd be tougher to enforce uh any regulations.

45:56 So what what are the regulatory challenges posed by this this influencer issue?

46:02 It's a great question and it's actually one

46:04 that regulators around the world are looking at right now.

46:08 Um, so you're right.

46:10 Uh, if influencers may unintentionally, uh, trigger securities law obligations.

46:16 Um, and so they may believe, uh, that they're just educating,

46:20 but their content can still be

46:22 regulated if it reasonably influences investment decisions.

46:26 Um, and sometimes influencers may have

46:30 difficulty distinguishing general advice from uh, registerable advice.

46:35 Uh there is a general advice exemption from this registration

46:39 requirement that many influencers could be relying on.

46:44 Um social media formats make it easy

46:47 to omit or obscure disclosures that are legally required.

46:50 So I guess you know check it out check it twice.

46:55 Um I will say that um the steps that we've taken to inform

47:01 consumers about these issues uh have uh really uh been a focus lately.

47:09 So the OC together with the Canadian securities administrators and zero released

47:14 staff notice 31369 which um you can look it up there if

47:19 if you like uh and you've probably seen it but it explains

47:22 how existing securities laws apply

47:24 to influencers and online investing uh content.

47:27 We made a real effort with this one.

47:30 Uh I mean staff know this is generally they tend to be a bit more um legalistic.

47:36 uh they are generally written by lawyers

47:39 uh read by lawyers um and market participants.

47:43 This one in particular has been written in a way

47:46 that is uh very plain language, very accessible.

47:50 It emphasizes that securities regulators

47:53 actively monitor influencer activity and um

47:57 you know not financial advice disclaimers do not uh override legal obligations.

48:03 And so we're running a nationwide social media campaign on this and then

48:08 we'll have more coming to ensure

48:09 that influencers and investors are well informed.

48:12 There have been efforts by other regulators um around the world,

48:16 notably the FCA in the UK onfluencers as well.

48:20 So this is part and parcel of sort of a larger effort.

48:25 Makes sense because it is it is a it's

48:28 a tricky issue and as you've talked about there

48:30 are a ton of people who are getting advice

48:32 from people who are not qualified to give it scary.

48:37 Yes.

48:38 I mean we can't just fall back on caveat mour by a beware right like it's it's

48:44 uh you know steps like this um this influencer

48:47 initiative I think really go the extra mile

48:50 to make sure that it's really clear the rules

48:53 are there um and there's a promotion campaign

48:56 attached to it to make sure we're getting

48:58 in front of the people who are providing advice online.

49:03 Yeah.

49:03 because most people I think do they want to follow the rules like they

49:07 don't want like I think generally speaking most people do um of course there

49:13 are those who don't but it's just about making sure people also understand

49:16 that when you go online and you

49:18 start providing advice um these are the guidelines.

49:22 Yeah, it's especially like some of the data you shared

49:24 on who is more likely to take the influencer advice.

49:27 Like it's they're they're unsophisticated investors.

49:29 So the buyer beware, like you said, just doesn't uh doesn't really work.

49:34 Yeah.

49:34 I think we have a greater duty of care than to say that.

49:38 Yeah.

49:38 Yeah.

49:38 Yeah.

49:38 Uh so I I talked about my AI impersonation experience.

49:42 Can you talk about how else you guys

49:43 are seeing AI being used to perpetrate investor scams?

49:48 Oh, so many ways.

49:50 Um, so when it comes to AI, we've talked about the deep fakes.

49:58 I actually do want to just speak a little bit about

50:03 what can uh what can be done to help as well.

50:07 Um, and so we we did dig into sort of the different types of scams,

50:11 but thing I want to say is we have a fraudulent

50:15 web removal service like it's called the takedown service and formerly

50:18 in the CSA um has been actively working with a third

50:22 party service provider to remove fraudulent

50:25 investment platforms and cryptocurrency scam websites.

50:29 And so between June 5th and November 23rd,

50:33 they deactivated nearly 4,000 to 3,900

50:37 fake investment platforms and cryptocurrency scam websites.

50:41 So um I just wanted to sort of flag that as uh

50:46 a bright spot that work is being done in this area.

50:52 Um, when it comes to sort of the different types of scams, uh,

50:57 that there are out there, um, I mean,

51:00 we've talked about, um, being skeptical of urgency and hype.

51:04 Um, but you'll see unsolicited offers, um, you'll see, uh, sort of, uh,

51:11 all the hallmarks of traditional fraud,

51:12 guaranteed returns, exclusive AI based opportunities.

51:17 These are all warning signs.

51:19 Um, and so it it really is um turbocharging those traditional scams as I said,

51:28 but um what I'd like to make sure we we talk about is AI as a magnifying glass.

51:40 So AI enhanced scams take the traditional

51:43 scam world and just magnify this for investors.

51:47 So it's a much riskier place uh than it used to be.

51:53 Um and so we are seeing um in our study uh one study

51:59 we did participants invested 22% more

52:03 in AI enhanced scams than in conventional scams.

52:08 And AI often removes common red flags like poor grammar,

52:14 inconsistent formatting, making scams appear more legitimate and professional.

52:20 Um, and they have, as I mentioned, that greater scale and reach.

52:25 So, fraudsters can target more investors more quickly,

52:30 build lists, build leads, uh, and they become more widespread.

52:36 So there's the different types of scams,

52:38 but then there's also the way that the technology

52:40 is used to to reach the investors as well.

52:45 So that sort of leads to the question of, you know, how we can mitigate it.

52:49 Um, is the solution a technological one

52:54 or is it just more about raising awareness?

52:57 Is there anything that people can do

52:59 to protect themselves beyond simply, you know,

53:02 the typical advice of just kind of learn

53:05 what the warning signs are and be skeptical

53:07 as there must be something else that we can do to to kind of push back.

53:14 Yeah, there is.

53:15 And um yeah, so there are system level mitigations.

53:20 So you can get tools such as browser plugins or platform level warnings.

53:24 They flag suspicious investment contact.

53:27 They can materially reduce scam investments.

53:30 Um shows uh up to 31% in some experiments.

53:35 There are just in time uh messaging uh mitigation.

53:40 So these would be prominent alerts that highlight scam risk

53:44 at the point of decision can

53:46 reduce impulsive investing in fraudulent opportunities.

53:50 Um and then when it comes to persuasive techniques,

53:54 um exposing investors in advance to examples of AI

53:58 scams and explaining common tactics does reduce susceptibility to fraud.

54:04 We know this and so you know the idea is we call

54:09 it inoculation and it's um education is inoculation or form of it.

54:15 Um, other things investors can do to protect themselves.

54:20 You know, I mentioned being very skeptical.

54:23 You know, uh, in the journalism world,

54:25 it's where I started a long time ago, uh, in financial journalism.

54:30 You know, we had a saying, if your mother says she loves you, check it out.

54:34 So, you really have to be very skeptical of any offer that comes you your way.

54:38 And you know, any advisor or uh

54:42 financial professional sort of worth your time is

54:46 going to uh work hard to make sure

54:49 that you feel you're making the right decision.

54:51 And it's okay to ask questions and kick the tires.

54:54 Um you know, ask them what their credentials are

54:57 and um and really be very suspicious of unsolicited offers.

55:04 you know, if you don't know this person very

55:07 well and suddenly they coming to you with, you know,

55:10 an investment opportunity, um, you know, they have a great lifestyle and you're

55:16 hoping you can have a piece of that too, like that's a huge sign.

55:20 Um, anything with guaranteed returns, you know,

55:23 unless it's a GIC is is pretty much a big red flag as well.

55:28 Um, and then we talked about exclusive AI based opportunities.

55:32 Um that's a a common theme.

55:35 Um and the verifi the verification before investing.

55:40 So independently confirming the legitimacy of the investment,

55:44 the promoter and any claimed endorsements

55:46 using trusted sources like get a notebook,

55:49 write it down or put it in your OneNote in your computer.

55:53 Um get all the details and check it out.

55:57 Um, and then when you have all of that information,

56:00 you need to go get some second opinions.

56:04 You know, the reality is we spend way more time uh choosing a fridge

56:08 or a washing machine than we do uh

56:10 checking out uh and getting second opinions on investing.

56:14 Um many of us and I think it's it shouldn't be that way.

56:18 We these are major decisions.

56:21 um taking time and consulting registered professionals

56:25 uh your trusted friends and family um

56:28 and regulatorbacked resources uh really does reduce

56:33 the likelihood of falling victim to a scam.

56:36 And then finally, of course, to come full circle, get smarter about money.

56:40 Uh we have a whole section on frauds and scams, and the more education you have,

56:44 the better you'll be able to spot and prevent fraud.

56:48 Yeah, that's awesome.

56:49 I I I love that.

56:50 inoculation point that I did a video last year because I was

56:54 noticing these uh there was every time I would post a video there'd

56:58 be all these bots in the comment sections and they would be having

57:02 these like conversations with themselves promoting

57:05 a specific name always a full three

57:08 name first middle and last name and if you Google there'd be

57:13 no link but if you search that name it would take you

57:15 to a fake landing page it was clearly a scam and so I

57:18 like clicked through and had my ops set up pretty well to protect myself,

57:23 but I communicated with a scammer to just see what would happen

57:26 and then made a video about it to try and, you know,

57:29 show my my viewers like, hey, if you're seeing these, this is what

57:31 they're trying to do for that inoculation reason.

57:34 But then but then they they that stopped and now it's the AI thing.

57:37 So they move so fast.

57:38 I think the inoculation can just be it can be tricky.

57:42 Well, they move fast.

57:44 And also, you know, one thing we haven't

57:46 really dug in on is the relationship investment scam.

57:49 Sometimes called long haul scams and sometimes

57:52 very uncharitably called pick butchering scams.

57:56 But this is when uh you have a person who's approached you

58:02 and over time become your friend uh who you may or may not meet.

58:07 um and uh they're getting close to you and suddenly in comes the ask

58:15 um for you to join an investment club or hey I've been doing some

58:19 crypto uh investing and it worked out really well for me and maybe it

58:23 starts with a hundred bucks and it kind of goes and goes and goes.

58:26 This can happen to anyone and there is a loneliness epidemic out there, right?

58:31 We we have our phones, we're all connected,

58:33 but real human contact, particularly those who are more vulnerable and isolated,

58:37 they do tend to um uh be more

58:40 prone to the relationship investment scam and they're insidious.

58:45 Um I watched a presentation um by the global anti-scam

58:51 alliance at the recent IASCO meeting and they took us

58:54 behind sort of the dashboard of how these scam farms

58:58 operate you know which in and of themselves are terrible

59:01 operations you know mainly often powered by traffic to individuals

59:05 and you have your dashboard and you you know say

59:09 if you've ever gotten a text from someone named VU

59:12 this was the example they gave sort scam that was happening

59:15 for a while and and this person had a dashboard

59:17 this 20 to 30 of you know different pings um

59:22 and then some most people don't respond but some do

59:26 and when they respond it's figuring out what to say back

59:30 to them using the AI translator and then getting them

59:33 to a point where you pass on to the next room

59:37 right which is the person who's dedicated to talking to that person

59:40 over time building the relationship then to the voice team.

59:44 Then you know into the mode where you're

59:47 working on the investing uh uh sort of ask.

59:51 Um and then of course at the very end there's

59:54 the recovery room scheme which happens frequently and then the final

59:59 phases they completely disappear from your life and you're you

1:00:02 know and you know it is happening at an alarming rate.

1:00:07 It is not unique to Ontario or Canada

1:00:10 or even North America that is are happening globally.

1:00:13 But the relationship investment scam is a particular insidious one.

1:00:19 Um something to just be aware of because money is emotional, right?

1:00:24 And if you've ever tried to talk someone out of,

1:00:27 you know, a situation that's maybe not good for them emotionally,

1:00:30 this can be one of them, too.

1:00:32 And we have resources on get smarter about money about this.

1:00:35 um what how to uh uh also how to uh

1:00:39 handle it if you've been the victim of fraud.

1:00:42 Um and there are resources available because it is

1:00:44 an extremely emotional moment when a person realizes that they have

1:00:49 fallen victim to a scam and unfortunately we we handle

1:00:53 that on uh on a daily basis when our contact center.

1:00:58 Yeah, it's one of the most upsetting ones, right?

1:01:00 Because I mean on some level some investment scams, you know,

1:01:03 I think there's a tendency to feel a little bit like

1:01:06 somebody promised you a guaranteed 20% return and you jumped at it.

1:01:11 Maybe you're just being greedy and maybe a little bit foolish.

1:01:14 The relationship one is really preying on a person's emotional vulnerability.

1:01:19 It's not about greed.

1:01:21 It's not about investment returns.

1:01:23 It's just about a need for something very fundamentally

1:01:26 human and somebody just heartlessly taking uh advantage of it.

1:01:32 That one that one really I think is upsetting uh to have to witness and some

1:01:37 of the stories that we've read about people

1:01:39 who have fallen victim to that are really depressing.

1:01:43 So yeah, I mean anything that can be done

1:01:45 to mitigate those is obviously you know hugely important.

1:01:50 Yeah, I think education um you know discussing

1:01:53 it on you know major podcasts like this one.

1:01:55 Uh this is uh really sort of where um

1:01:59 where uh it makes a difference is the awareness campaigns.

1:02:03 Uh just getting out there talking about it.

1:02:06 Um and also making it okay to talk about money.

1:02:09 Um, in one OCMA community event that I was at, um,

1:02:13 I was speaking to a woman in her 90s and she

1:02:17 thanked us for coming in and she absorbed the whole presentation.

1:02:20 She has some questions, um, related to some of her own uh,

1:02:25 personal uh, investment uh, uh, matters uh,

1:02:29 which we referred to the contact center because they were

1:02:31 getting quite detailed and she she needed some advice there.

1:02:34 Um, but she did say to me, you know, we just never learned this at school.

1:02:41 We didn't talk about money growing up.

1:02:43 And many households that is the case.

1:02:47 Um, but it is important to, and I would say for those of you who have children,

1:02:51 talk to them about money early on.

1:02:53 Um, definitely, uh, we're finding younger people getting into, uh,

1:02:59 in the idea of investing, maybe even treating it like a game.

1:03:03 Um, and uh just it's it's important

1:03:07 to have the money conversations uh blunt ones early.

1:03:13 Yeah, I definitely try to do that with my kids

1:03:15 and they're they're they're pretty engaged about they they know what

1:03:18 I do for a living and they know that I make

1:03:19 YouTube videos about finance money that a lot of people watch.

1:03:22 They're like they'll probe and ask questions and they're they're pretty curious.

1:03:25 They don't they uh they're not like that super excited or passionate about it,

1:03:29 but they'll say like, "So,

1:03:30 what was your podcast about today?" and I'll tell them like,

1:03:33 "Oh, cool." Anyway, there my oldest is uh dad's on YouTube.

1:03:37 That's already your cool, right?

1:03:39 Yeah.

1:03:41 Uh okay.

1:03:42 So, we've been talking about like overt like illegal scams.

1:03:46 Um, something else that can be insidious but is not illegal,

1:03:51 I don't think, is is gamification, as you mentioned earlier,

1:03:54 where sometimes these apps are influencing the ways that people behave

1:03:59 in a way that's probably not leading to good investor behavior,

1:04:02 but is leading to behavior that's profitable

1:04:04 for the company that created the app.

1:04:06 Can you talk about how gamification in investing

1:04:08 apps might be affecting retail investor behavior?

1:04:11 Yes, it's a great topic and it's one that the OC's done a lot of research on.

1:04:16 Uh we're very uh grateful to our our thought leadership

1:04:20 group and behavioral insights group and they've taken a you know

1:04:23 rightfully so a good focus on this um and sort

1:04:27 of working uh with uh best practices uh globally on this.

1:04:31 Um, so gamification and digital engagement practices more broadly

1:04:36 can influence investor behavior in positive and negative ways.

1:04:41 So it's not inherently good or bad.

1:04:44 Um the existing research that our teams did found some negative

1:04:49 effects on investor behavior including uh increased trading frequency which is

1:04:57 associated with lower returns and uh what we call a hering

1:05:01 effect in which investors gravitate

1:05:04 towards securities promoted via gamification techniques.

1:05:09 So while gamification techniques can make investing platforms more engaging,

1:05:15 there is concern and rightfully so with associated

1:05:19 evidence surrounding that downstream impact on investor outcomes.

1:05:29 So what are some of the mitigation techniques then

1:05:31 that can be used to kind of reduce the negative effects?

1:05:34 They might not all be negative,

1:05:35 but obviously we want to shift it in the in the positive direction.

1:05:40 Well, I mean, mitigations can be deployed at the individual level.

1:05:44 Um, so there are things you can do yourself if you're trying out these platforms

1:05:49 um as opposed to systemically uh to increase

1:05:54 the likelihood of investors changing their behavior.

1:05:57 So broadly speaking,

1:05:59 mitigations can be used either before an investor encounters

1:06:02 gamification techniques or during their uh encounter with uh gamification.

1:06:10 So while research in the investing domain is limited,

1:06:15 several techniques uh that our teams recommend

1:06:19 could hold promise in protecting investors from gamification.

1:06:23 Uh so those include requiring a users to opt in to being exposed

1:06:27 to gamification on investing platforms um rather

1:06:31 than being automatically opted in and then

1:06:34 within platforms uh disclosures or labels drawing users attention to some

1:06:39 of the risks associated with gamification techniques

1:06:42 and then creating positive frictions within apps.

1:06:46 So confirmation screens to encourage more deliberation among users.

1:06:52 Those are some of the uh the different uh mitigation

1:06:56 techniques that can help reduce the negative effects of gamification.

1:07:02 Can you talk about how the get smarter about trading simulator works?

1:07:06 Yes, absolutely.

1:07:07 Have you tried it yet?

1:07:08 I did play with it yet.

1:07:10 Okay.

1:07:11 Well, so um yeah, it's it's a it's a fun tool we created.

1:07:15 Uh so you get uh $10,000 um in obviously uh not real funds um and you

1:07:25 invest in a list of stocks uh and we

1:07:28 use a few gamification techniques throughout the simulator.

1:07:32 So you get get into uh the simulator.

1:07:35 It just basically helps people understand how the gamification techniques may

1:07:40 be influencing their trading behavior

1:07:42 and help investors make more informed decisions.

1:07:45 And um so you log in uh you see your wallet, you um your your available funds,

1:07:52 you're given a list of sort of you know limited information.

1:07:55 It's not the Bloomberg terminal by any means.

1:07:58 Um but uh you've got uh these uh fictitious um stocks

1:08:04 with a bit of share history and sort of they've been up or down

1:08:08 and then you go through uh I think it's eight days once you

1:08:12 set your your book you move forward and then you go day by day.

1:08:16 Do you want to make any changes?

1:08:18 You know, it's funny.

1:08:19 I'm I I went through I picked everything on day one and went through

1:08:25 the first time and just didn't change a thing and ended up slightly down.

1:08:30 And I think you know for those of us who understand

1:08:33 that if you're going to you know 8 days is actually not

1:08:36 a very long time and you have to you get charged

1:08:39 every time you you trade but then they would give you points.

1:08:42 So um for those people who would make decisions

1:08:46 every single day and would be looking at points

1:08:49 they're getting which you know of course don't have

1:08:51 a financial value but their amount is going down.

1:08:55 It would be sort of a learning opportunity but of course

1:08:57 as you're going through the tool we're collecting sort of um you know

1:09:00 the uh just the the user um behaviors and uh it's it's

1:09:06 an interesting way to see how people may behave uh in those situations.

1:09:13 Yeah.

1:09:13 So, how does gamification Oh, sorry.

1:09:16 Oh, so sorry.

1:09:17 Yeah, it just highlights the specific gamification

1:09:20 techniques used and it just helps you

1:09:23 appreciate those subtle but powerful ways that they may try to draw you in.

1:09:28 Yeah, I'm just wondering how how gamification can be

1:09:30 used to kind of improve investor outcomes because certainly

1:09:33 there's going to be some um negative effects associated

1:09:37 with but but there's probably some positive ones as well.

1:09:40 So yeah, um I think that we have um a pretty good stat there.

1:09:46 A 3.5 to 4.5% increase in diversification

1:09:50 when positive gamification techniques were used.

1:09:54 Uh in our most recent research and experimentations um generally showing

1:09:59 that gamification can improve investor

1:10:02 outcomes through increases in portfolio diversification.

1:10:05 So beyond diversification,

1:10:08 gamification can be deployed by platforms to encourage a range of positive

1:10:13 investor behaviors including reaching savings

1:10:16 goals and appropriate levels of risk-taking.

1:10:20 And um so the examples uh that could

1:10:25 be used to achieve these outcomes include feedback,

1:10:29 goal and progress framing, rewards, and social interactions.

1:10:36 All right.

1:10:37 So, let's just wrap up with a few final questions.

1:10:40 Let's just going to ask you what of which of the OSE priorities

1:10:44 or initiatives that you're working on now

1:10:47 are you most excited about for the future?

1:10:50 Absolutely.

1:10:50 Um well, I'll be honest.

1:10:53 Uh when I came on, it was just uh just

1:10:56 over a year ago uh leading into uh starting here.

1:11:01 It was the entire strategic plan I was attracted to.

1:11:04 Um I think you know it it was beautifully laid out.

1:11:09 It all made sense all the pieces of the organization working together and I

1:11:13 found that very uh attractive you know for someone coming in and wanting

1:11:17 to have you know sort of this challenge um you know really apply the MBA

1:11:22 really get into an organization and help drive a very clearly laid out strategy.

1:11:28 Uh there are six goals in this strategy.

1:11:31 Goal two enhance the experience of the in uh

1:11:35 uh the indiv investor individual investor.

1:11:38 That is the one that I live every day.

1:11:41 Um all of them matter but that is the one uh

1:11:46 that I I work on most closely in the investor office.

1:11:51 It's really cool.

1:11:51 I mean, it's it's it's incredible for people in Ontario,

1:11:54 but really anybody because anybody can access the resources the OC is creating.

1:11:58 It's a it's an incredible resource.

1:11:59 Like what a what a service you guys are providing to the public.

1:12:03 Oh, thanks very much.

1:12:04 I mean, you know, really it comes down to ensuring

1:12:07 that investors are positioned to make better life cycle investment decisions.

1:12:12 you know, have whether it's having that investor

1:12:16 redress system in place that we talked about.

1:12:19 Um whether or not, you know, uh you know,

1:12:22 how we can help uh reduce investor harm, uh through uh education,

1:12:26 population um making sure that investors and advisers

1:12:30 have a better understanding of financial and securities markets.

1:12:34 Um, one thing to watch uh towards um like a big moment

1:12:39 um in goal too is we're launching our fraud prevention month campaign soon.

1:12:43 So uh be sure to visit get smarter about money and um and follow our social

1:12:48 media channels and uh we're we're hoping that really

1:12:50 helps um get the word out as well.

1:12:54 Yeah, we'll we'll link to those resources in the episode

1:12:57 show notes so people can check it out.

1:12:58 It's honestly it's such a good website.

1:13:00 And I I think the reason that I always link to it is because it's great content,

1:13:04 but it's from like a neutral source.

1:13:06 Like there's no there's no conflict of interest where like, oh,

1:13:10 are they doing this because they're trying to sell me a product?

1:13:12 So that's between the content content being good.

1:13:16 It's really good quality, and the fact that it's so obviously unbiased,

1:13:20 it's it's just such a useful resource.

1:13:22 Oh, thank you.

1:13:23 Yeah.

1:13:23 No, it's a really dedicated group of individuals there.

1:13:25 I'll definitely pass that compliment on to them and uh yeah,

1:13:29 it's uh it's uh definitely uh uh

1:13:32 something that everyone's very passionate about over here.

1:13:35 Yeah.

1:13:35 Oh, you can tell you can it come comes out through the through the content.

1:13:39 Uh final final question for you, Teresa.

1:13:41 How do you define success in your life?

1:13:44 Oh, okay.

1:13:45 So, I I see we saved the easy question for the

1:13:52 um I actually have a good answer for that.

1:13:54 Um so I am a big believer in defining your purpose.

1:14:00 Um I uh teach a class on uh developing your leadership

1:14:05 purpose um at IV uh regularly come in and do

1:14:10 that and listening to people develop their purpose through the challenge

1:14:16 action and result they want to drive in their lives.

1:14:19 Um, it has a it's sort of um it has a way of helping me

1:14:26 also think about what I want to do and coming back to sort of my purpose.

1:14:33 Uh, and then living that purpose,

1:14:35 making sure that we have the courage to kind of go out and do

1:14:40 sort of the big bold things that we need to do to go out there.

1:14:44 um mine is about uh driving change through innovation and bringing

1:14:51 uh different groups together to find that common ground and move forward.

1:14:55 Um and I think that uh it comes down to courage

1:15:01 to change and making sure that you're always prioritizing the collaboration.

1:15:09 You know that saying that if you want to go uh fast, go alone.

1:15:13 But if you want to go far, go together.

1:15:16 Um I would say that if I've gone uh far and perhaps a bit fast with others,

1:15:25 um then that is uh true success in life.

1:15:30 It's a great answer and you have clearly thought about it.

1:15:34 Thank you.

1:15:34 And that of course and my kids.

1:15:37 Of course.

1:15:38 All right.

1:15:38 This has been a great conversation, Theresa.

1:15:39 We really appreciate you coming on the podcast.

1:15:41 Yeah, I really enjoyed it and all the best

1:15:43 and uh thanks very much for having me.

1:15:50 Hey everyone, it's producer Matt.

1:15:52 Thank you so much for tuning in to this week's episode.

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