Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Bridging Canada’s Advice Gap with Global Insights
Financial Advice | July 8, 2025
Image: Freepik/rawpixel.com
The UK is Enabling New Financial Advice Models. Should Canada Act Too?
In the UK, the Financial Conduct Authority (FCA) has proposed a new approach to tackle the issue of improving access to financial advice, so people can make informed investment decisions. The FCA is calling this a 'once in a generation' reform that would let firms provide targeted and simplified financial advice to underserved populations without the regulatory burden of full-service advisory. Should Canada be exploring a similar path?
On June 29, 2025, the FCA released a consultation in effort to alter how financial guidance is delivered. According to the regulator, only 9% of UK adults received regulated advice in 2024. At the same time, over 7 million people are holding more than £10,000 in cash without investing it. The proposed rules include two core categories:
- Targeted support would allow firms to provide grouped financial nudges based on shared characteristics, such as young adults holding idle savings or retirees at risk of over-drawing retirement accounts. This type of guidance could be delivered digitally without full fact-finding.
- Simplified advice would allow firms to offer limited product recommendations to individual clients without conducting full suitability assessments currently required. These rules are intended to reduce compliance costs and encourage firms to serve every day clients.
See: Where the Gaps Are: Fintech Insights from FCA Data
The FCA expects around 100 firms to offer services under these reforms by April 2026. The proposal aims to support better outcomes for consumers while still protecting investors.
Canada’s Investment Advice Landscape
In Canada, regulated investment advice is tightly controlled. Firms offering investment recommendations must be registered with a provincial securities regulator and meet strict know-your-client (KYC) and suitability obligations. This approach is critical for investor protection but it creates high cost and operational barriers for reaching clients with modest portfolios.
The FCAC’s National Financial Literacy Strategy 2021–2026 emphasizes its mandate to enhance Canadians’ financial knowledge and resilience, but efforts so far rely heavily on education, tools, and public awareness. The CSA’s Investor Education Committee has launched social campaigns, investor alerts, and literacy tools to empower Canadians to make informed financial decisions.
According to CSA research, more than 40% report low confidence in their investment knowledge. Findings show a decline in advisor use (down to 61%), while DIY attitudes rise (45% have self-directed accounts), raising concerns about whether Canadians have sufficient knowledge and confidence to manage investments on their own.
Robo-advisors and the Evolving Opportunity
Canada’s robo-advisor market is expanding swiftly. Wealthsimple alone manages over $70 billion CAD (as of June 2025), Questrade’s Questwealth holds $30 billion CAD (early 2020), and even more growth is expected as digital investing gains traction, with services increasingly adopted by younger investors. These platforms offer digital-first, affordable investment tools, but remain constrained by current regulatory expectations.
See: Report Insights: DIY Investors in Canada on the Rise
By contrast, the FCA's framework could allow robo-advisors to deliver access to simpler advice or proactive guidance based on behavioural data. These changes have the potential to increase access while reducing costs, without compromising key investor protections. In Canada, any comparable flexibility would require regulatory change.
Finfluencers and Informal Advice
Another growing channel for financial guidance is social media. In Canada, 82% of Gen Z investors report following influencers for financial tips, and 44% believe online advice is as useful as traditional advisors. While some content is educational, the Ontario Securities Commission and Alberta Securities Commission have raised concerns about unregistered finfluencers promoting securities without appropriate disclosures.
If Canada created space for fintechs and advisors to offer low-cost, regulated advice digitally, it could reduce dependence on informal and sometimes misleading content. The FCA’s 'once in a lifetime' reforms aim to do just that, offering a model Canada could adapt to fit our regulatory landscape.
Outlook
Canada’s fintech innovators are capable of building trusted, scalable tools to help close the advice gap. But changes to regulatory structures need to happen to support new delivery models. The FCA’s targeted support and simplified advice categories are a good benchmark and approach. Canadian regulators and policy makers should be exploring how to safely expand access to financial guidance that is compliant, cost-effective, and in the public interest.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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