A Look Inside 2024 DIY Investing Trends in Canada

Report | Release | Sep 6, 2024

Image: DIY Investing 2024 National Survey report (BCSC)

BCSC's 2024 DIY Investing Report Dives Into the Latest Trends and Demographic Shifts

The British Columbia Securities Commission (BCSC) recently commissioned the Innovate Research Group to compile the DIY Investing 2024 National Survey Report (131 page PDF) to better understand the latest trends and how do-it-yourself investors and social media are influencing the direction of retail investing.   See the media release here.

1. Who Are DIY Investors? Changing Demographics

Over the past few years, the demographic profile of DIY investors has shifted.  DIY investing is becoming increasingly popular among younger and tech-savvy Canadians.

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• Younger, More Diverse Investors - According to the research, men make up 75% of DIY investors and most of them are under 45 years old. With 38% of Canadians identifying as visible minorities, indicating an increasing tendency of younger people managing their own investments.
• There is an increase in "Hyper-engaged" DIY investors (23% of all DIY investors), who actively engage in trading and research on a daily basis. This segment has increased over prior years, confirming that younger generations are engaging more regularly and knowledgeable about trading than before.

2. The Increasing Influence of Social Media on Investment Decisions

Social media has become an increasingly important factor in investing decisions and trend is not slowing anytime soon.

• In 2022, 20% of DIY investors said they rely on social media to help with investing decisions.  However, it increased to 24% in 2024, demonstrating the growing influence of websites like Reddit, TikTok, and YouTube now have on DIY investing decisions. This trend is being driven by younger Canadians, especially those between the ages of 18 and 34, who are increasingly dependent on online groups and influencers.
• Even though more people are using social media, DIY investors are becoming pickier and prefer to weigh the pros/cons fairly and are cautious over content featuring memes and commercial like pitches, indicating there may be some trust issues brewing despite being open and actively relying on social media.

3. Shifting Investment Goals.  Moving Beyond Retirement Savings

While saving for retirement is still important, DIY investors are expanding their objectives and are looking for other benefits too, such as income and growth.

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• While 78% of investors still list retirement savings as their top motivation, DIY investors are now also looking for:
• Possibility of big profits (19%);
• Extra income generation (42%);
• Enjoyment (16%)

4. Financial Literacy and Risk Tolerance Has Increased

• Hyper-engaged do-it-yourself investors are more confident and have increased their financial literacy experience significantly, with 34% of them receiving high scores on these tests. As investor confidence grows with increased access to the internet and online resources, there's an increase in the propensity to take risks.  This higher risk tolerance is a considerable shift given that in previous years the primary motivation for DIY investing was a more risk-adverse, cost-saving activity.
• Nearly 49% of Hyper-engaged investors are willing to take substantial risks, indicating a trend towards more active, high risk investment strategies.

5. Why Do Some DIY Investors Quit

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DIY investors value the autonomy but the demands of keeping informed and actively managing their assets can wear them down over time.

• 21% of previous DIY investors quit due to time constraints
• 19% cited a lack of competence to manage their investments alone.

6. Persistent Distrust with Advisors

• A recurring among DIY investors is that they mistrust advisors.
• Further, 14% say they have little faith in financial institutions because they don't think the value is worth the price.

Outlook

As more Canadians (especially younger generations) seek ownership and more control over their investments, financial institutions must innovate and provide more digital tools to remain relevant.  Hybrid models that combine DIY investing with professional support may emerge as a middle ground.

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