PROTECT YOUR MONEYOSC in the Community Presentation

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PHOTOGRAPHY

• We may take photo(s) of this event

• Photos will be taken form the back of the room, focusing on presenter and ‘back of the audience’

• The photos may be published, including on the OSC website and OSC social media accounts

• If you prefer to not appear in any photo(s), please advise the presenter at the start of the presentation

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ONTARIO SECURITIES COMMISSION

• Crown corporation that regulates the securities industry

• Provide protection to investors from unfair, improper or fraudulent practices, to foster fair and efficient capital markets and confidence in capital markets, and to contribute to the stability of the financial system and the reduction of systemic risk

INVESTOR OFFICE

• Leads the OSC’s efforts in investor engagement, education, outreach and research

• Plays a key role in oversight of the Ombudsman for Banking Services and Investments (OBSI)

• Provides leadership in the area of behavioral insights at the OSC

INVESTOR INSIGHTS

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ENCOURAGING RETIREMENT PLANNING

• Interviewed Ontarians to learn how the financial sector, government, regulators, employers, and other stakeholders can encourage retirement planning:

• Make it easy to get started• Simplify information and choices• Emphasize short-term benefits of retirement planning• Provide information at key life milestones• Help build financial confidence

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FINANCIAL CONCERNS OF ONTARIANS 45+

• 25% retirement related: • have enough to retire• plan and save for retirement• maintain quality of life

• Almost 50% of pre-retired homeowners aged 45+ are relying on their home to fund retirement

• 26% of retirees are relying on their home to fund their retirement

AVOIDING INVESTMENT FRAUD

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ENFORCEMENT

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INVESTMENT FRAUD

• 1 in 20 Canadians is a victim of investment fraud

• 1 in 5 Canadians have been approached with a potential fraud

• Fraud is an underreported crime

• Affects mental and physical health, relationships, quality of life

• 32% of victims were more vulnerable to physical illness or panic and anxiety attacks

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AFFINITY FRAUD

Target: Groups sharing a common identity (e.g. cultural, religious, occupational, sports related)

How it works:•Fraudster approach potential victims through a group or community organization that they belong to•When they have developed a strong relationship or gained the groups trust, they convince people to invest in their scheme

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PONZI SCHEME

Target: Investors

How it works:•Investors are recruited and encouraged to recruit others•New investors money are used to pay investment returns to earlier investors•Returns are not earned from investments

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PUMP AND DUMP, BOILER ROOM

Target: Anyone with money

How it works:

•Investors may receive an unsolicited phone call or e-mail

•Encouraged to buy promising over-the-counter or penny stock

•As demand for the stock increases, stock price increases

• When all the stock (shares) are sold, share price plummets – shares are worthless

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BINARY OPTIONS

Target: Anyone with money

How it works:•Encouraged to place all or nothing bet on how an asset will perform in a limited amount of time•Usually use credit card to finance transaction

Binary options trading platforms are not registered to operate in Canada

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DOUBLE DIP/REPEAT SCAM

Target: Fraud victims

How it works:•Con artist will create, reuse and sell lists of victims•Fraud victims are targeted for repeat scam•“Initial investment will pay off if you send more money”•“Previous investment will pay off if rolled into a new one”

3 out of 10 fraud victims are defrauded more than once

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OTHER INVESTMENT SCAMS

• Offshore: promise no tax or lower taxes and huge profits if you send money offshore

• Exempt securities: promote as investing in exempt market

• Pension: promote as RRSP loan to get to your locked funds

• Forex: promote easy access to foreign exchange market

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WARNING SIGNS OF FRAUD

• High pressure sales tactic – Act now!• Phone call, email from someone you don’t know• Promise or high return with low risk• Encouraged to recruit friends/family• Unregistered seller• Suggest falsifying financial information• Tax avoidance strategy• Company about to be listed on an exchange

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DO A BACKGROUND CHECK

• Check registration of individual/company

• Find out what products/services the individual is registered to provide

• Learn if any disciplinary proceedings

• Get investor alerts and warnings

Visit: CheckBeforeYouInvest.caCall: 1-877-785-1555

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IF YOU SUSPECT A SCAM

Contact•Ontario Securities Commission

Toll free: 1-877-785-1555TTY: 1-866-827-1295Email: inquiries@osc.gov.on.ca

•Your local police

•Canadian Anti-Fraud Centre1-888-495-8501

•Canada Revenue Agency1-800-959-8281

WORKING WITH A FINANCIAL REPRESENTATIVE

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FINANCIAL REPRESENTATIVES• Must know you – goals, financial circumstances, time horizon, risk

tolerance

• Must make suitable investment recommendations

• Must know the product they recommend – structure, features, costs, fees, risk

• Must tell you how they’re paid

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CARE ABOUT YOUR INVESTMENTS

• Be open and honest about your finances

• Understand your money personality – ability to handle risk

• Understand what you’re investing in

• Ask questions!

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BEFORE YOU INVEST

Before you invest, understand the product, the risks and how much it costs.

•How does this investment work?•Why should I buy it?•How will it help me reach my goals?•How risky is it?•What are the costs to buy, hold and sell it?•When can I sell it?•Will I pay penalties or fees if I need to get my money out sooner?

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ASSESSING YOUR FINANCIAL REPRESENTATIVE

• Assess total returns over time

• Compare investment performance to appropriate benchmarks

• Assess the value your financial representative provides (advice,planning, availability)

• Decide if you’re happy with your relationship

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YOUR INVESTMENT STATEMENTS

• Annual report on investment performance

• Annual report on charges and other compensation

•See www.InvestmentReporting.ca for more information

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SIGNS OF A PROBLEM

• Little or no communication

• Investment recommendations don’t seem to match your goals

• Frequent or unusual trades on your statement

• Pressured to invest

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HOW TO MAKE A COMPLAINT

1. Talk to your financial representative and their manager

2. Escalate your complaint within the firm in writing

3. Contact Ombudsman for Banking Services and Investments, 1-888-451-4519Investor Protection Clinic, 416-736-5538

Need help: OSC Contact Centre Toll free: 1-877-785-1555TTY: 1-866-827-1295Inquiries@osc.gov.on.ca

(Can handle inquires in 200 languages and will respond to written inquiries within 3 business days)

OSC INVESTOR EDUCATION RESOURCES

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RESOURCES

GetSmarterAboutMoney.ca resources for seniors include:

•Annuities vs RRIFs•Reverse mortgage•Seniors and tax•Estate planning•Retirement cash flow planner•How to make your retirement funds last video•Calculators and quizzes

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HAVE AN INVESTING QUESTION?

GetSmarterReinvesting.ca

“My RRSPs are coming due this year. What are my best options for RRIFs?

“What rate do I use to calculate my RRIF withdrawal when I must convert my RRSP at 72? My wife is 5 years younger than me?”

“Can you transfer funds from an RRSP to a child’s RESP?”

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INVESTOR NEWS

Newsletter that covers:

•Timely topics

•Educational resources

•Investor warnings and alerts

•Upcoming events

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INVESTINGINTRODUCTION.CA

INVESTMENTS AND FINANCIAL PRODUCTS

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MUTUAL FUNDS/EXCHANGE TRADED FUNDS

Mutual funds•Pools money from many people and invests it in a mix of investments•Professionally managed•Fund Facts

Exchange traded funds (ETFs)•Fund investments are based on a market index or sector•Trades on a stock exchange•Not actively managed – costs tend to lower than regular mutual fund•ETF Facts

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CRYPTOASSETS

• Examples include Bitcoin, Ether, Litecoin

• Earn by mining OR purchase (e.g., through a trading platform or physical kiosk)

• Some people use them to purchase goods or conduct business online

• Innovative technology, but remember:

• Not legal tender

• Prices can be volatile

• Evolving regulatory landscape—OSC supports digital innovation through OSC LaunchPad

Learn more at GetSmarterAboutMoney.ca/crypto

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REAL ESTATE INVESTMENTS

• Property

• Real estate investment trusts (REITs)• Companies that own properties

• Mortgage investment entities (MIEs)• Mortgage financing companies

• Syndicated mortgages• Invest in a single mortgage or property

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CANNABIS COMPANIES

• Not all businesses produce/sell cannabis

• Government regulations are evolving

• Legal considerations – laws must be followed