CSA’s 2024 Investor Index. What Fintechs Need to Know

Investor Survey Report | Jul 31, 2024

Image: 2024 CSA Investor Index report

Core Insights from the CSA's  2024 Investor Index

The Canadian Securities Administrators (CSA) have published the 2024 CSA Investor Index (132 page PDF), which provides important insights on the attitudes and trends of Canadian investors via survey report. This article provides an overview of the major findings and trends useful for fintechs, as well as FAQ's to the most important queries covered by the scope of the report.

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This is the 7th iteration of the survey which collected data from 7,215 Canadians aged 18 and older. The findings are anticipated to inform investor education, fraud prevention, policy development and benchmarking of investor behaviours over time.

Key Takeaways

1. Increasing Dependency on Social Media for Information About Investments

There has been a noticeable shift in the use of social media as the main information source for investments in recent years. 53% of Canadians (82% among 12-24 age group) said they used social media in 2024 for this purpose, especially younger investors who regularly interact with sites like YouTube, Instagram, and TikTok.

• Tip:  Because of this demographic's dependence on digital platforms, fintech's should make use of social channels by providing trustworthy and engaging content for prospective (young) investors.

2. Use of Financial Advisors is in Decline

Only 61% of investors currently work with a financial advisor, down from 69%–71% in prior years, according to the survey, which shows a downward trend in the use of these professionals. This is true especially among younger investors and those with smaller investment portfolios, which may indicate that self-directed investing methods are becoming more and more popular.

• Tip:  Fintech businesses can benefit from this trend by providing a platform with comprehensive do-it-yourself investing tools and educational materials.

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3. DIY Investing is on the Rise

With 45% of Canadian investors handling their own accounts, do-it-yourself investing is a trend that's becoming more popular. Notably, among these investors, 30% began doing their own investing during the previous two years. The three main drivers based on responders are (1) the pleasure of investment management, (2) confidence in one's own expertise, (3) and the expectation of higher returns.

• Tip: Fintech companies have an opportunity to create resources and programs that assist self-directed investors to take advantage of this trend.

4. All Investors Get Investment Information from a Wide Range of Sources

Younger investors are increasingly turning to online sources for investment advice, while older investors still rely on conventional sources like banks and financial consultants.

• Tip: It's important for fintech businesses to offer a variety of financial information sources if appealing to all age groups.

5. Fraud Awareness AND Incidents are on the Rise

The report reveals a concerning rise in the incidence of fraud, with 23% of Canadians reporting encounters with potential fraudulent investments.

• Tip: To protect investors, it's absolutely critical for fintechs to incorporate strong security and fraud prevention mechanisms into their platforms.

Implications for Fintechs

Insights for Fintechs focusing on investment platforms and wealthtech tools from the Canadian investor survey are:

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• Platforms should incorporate educational materials to boost financial literacy and risk awareness.
• Investment platforms should be user-friendly and appeal to younger, tech-savvy investors.
• Offer a diverse range of investment products, including sustainable and socially conscious ones, that appeal to both novice and seasoned investors.
• Use the latest security measures to shield consumers from fraud and boost confidence in online marketplaces.

Conclusion

These 2024 CSA Investor Index survey report offers insightful advice for fintech companies hoping to innovate and cater to the Canadian investment market by taping into changing investor behaviours.

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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