Page 10 - CCCA Magazine Summer 2014

{ FiNaNCial literaCy } lessons In FInancIal lIteracy a conVersatIon For the legal proFessIon By Alena Thouin it was the end of law school and i was a month away from While lawyers in general remain far fnishing my law degree when a strange announcement less susceptible to investment fraud than the general public, the following initia- appeared on the school bulletin board: a fnancial literacy tive highlights the need for education seminar. as a soon-to-be graduate, i imagined that someone and open discussion amongst investors of all types. with my level of education and fnancial savvy would not need to bother with such basics. However, my curiosity and growing Bluehedge Investments Any good conversation should start with student line of credit got the better of me and i attended. a story. To show the ease with which f- nancial literacy can become a shield, and lack of it, a threatening sword, the Cana- he seminar was instructed by a rep- was plenty. I was presented with myriad dian securities regulators conducted an resentative from one of the major options and flled out an investor profle. experiment. From November 27, 2011, to tCanadian banks in a surprisingly I was given disclosure and detailed infor- February 5, 2012, the Canadian Securities packed room. During the seminar, I was mation on fund performance, along with Administrators (CSA) formed an initia- hit with a realization most likely feared by explanations on various less “mainstream” tive named BlueHedge Investments. 1 all law school grads: lack of knowledge. options. I also realized that my fnancial BlueHedge Investments was a fctitious The discussion topics ranged from debt adviser, having noted my occupation, as- company created by the CSA and adver- management to personal investment op- sumed that I understood these options tised through various promotions includ- tions. Despite taking a slew of corporate with minimal explanation and would be ing online advertisements and social me- law classes, many of us still struggled with able to make an informed decision. As my dia. The purpose of this initiative was to 2 interpreting a balance sheet and had only confdence level took a spectacular dive show how vulnerable investors can be and vague ideas about the complexity of in- during that frst session, I was still unable how elaborate the fraud is. vestment options and investor disclosure. to stop the conversation and bring it back The company’s website was designed I learned about some of these things to the basics to ask the necessary questions. to appear as a start-up specializing in later as part of my practice, but for many Luckily, my fnancial adviser believed green energy and resource allocation, of my peers who chose to focus on other in investor education that goes beyond seeking investment into projects with a areas of law, this knowledge most likely his professional obligation, and through limited investment window (30 days). never came. Yet, lawyers of all stripes are many future sessions, personal education The website contained all the necessary assumed to be suffciently savvy to make and an otherwise conscious effort to fol- information, including the rate of re- complex investment decisions and are of- low my investment portfolio, I felt more turn, a video, a VIP package request, and ten targeted by various types of investment comfortable with my choices. However, an FAQ section. The company was pro- opportunities, including fraudulent ones. had he been a fraud or promoting invest- moted by the CSA (without revealing its Much can be said on the matter of f- ments of fraudulent nature, the end result true nature) through various mediums to nancial literacy; however, as lawyers, we of- would have been different. attract potential “investors.” BlueHedge ten feel our knowledge is suffcient to avoid Over the next little while, I contacted Investments’ promotional campaign net fraud and recognize a “Bernie Madoff.” other classmates and colleagues, and quick- was cast far and wide through various so- We are both advisers (in our capacity as ly realized I was not alone. I also found it cial media outlets, search engine ads and counsel) and customers (in our capacity as interesting that others (often profession- email ads. The purpose was to reach a investors), and as such, our discussion of als) looked into less than “mainstream” op- wide audience and create a buzz about the fnancial literacy must include both. tions for their investment choices mainly company. An experienced investor would During the frst meeting with my fnan- as a result of effective advertising, whether notice the lack of substance. Many inex- cial adviser, the information and disclosure by their advisers or by other sources. perienced investors did not. 10 CCCa Magazine | suMMer 2014 été