However, the people who opened millions of new accounts can’t be neatly categorized. An Ontario Securities Commission (OSC) survey of self-directed investors in 2021 found that only about one-quarter signed in to their accounts daily. Three-quarters of investors made no more than 50 trades per year, with 43% making 10 trades or fewer. 

Kendra Thompson, national wealth and investment management leader at Deloitte in Toronto, said a lot of DIY clients log in just to check their balance. Some accounts were opened and never used, she said, while other investors have realized “they’re not day traders, and they ought to pick some good products and stick with them.” 

A British Columbia Securities Commission (BCSC) survey conducted last fall showed generational differences in DIY investing approaches. Investors between 18 and 35 increasingly own individual stocks, and the youngest cohort (those under 25) are more likely to be active traders seeking large returns. 

Investors under 25 are more confident than older investors about timing the market, the BCSC survey found, and more of them say they trade larger amounts for excitement. Younger investors are also far more likely to trade at least once per week. 

The survey also showed trust in investment professionals declined among the youngest cohort.

 Regulators have raised concerns about inexperienced investors getting burned and shunning markets. ISS data from online brokerages found younger investors were hurt most by last year’s downturn. 

“You can’t insulate people from what the market does, but there’s a real risk that if new investors make bad investments or foolish investments … those people may be gun-shy after,” said Neil Gross, president of Component Strategies Consulting in Toronto. “On a macro level, that’s a problem for society if our capital markets aren’t attracting retail investors anymore.” 

Some investment advisors don't offer financial planning, he said, so his practice is complementary for those clients. 

“It’s not like DIY investors and fee-only financial planners are the obvious mix,” he said. 

While Heath said he’s seen more DIY investors reaching out to fee-only financial planners, “it’s not a huge explosion in my experience.” 

Sean Etherington, executive vice-president and co-head of Canadian wealth for CI Financial in Toronto, said there wasn’t a large movement last year from CI’s direct trading and robo platforms to full-service advice, even though client referrals generally increase during market volatility, as investors seek professional advice. 

While CI’s advice side is growing faster than the direct businesses, he said, the volume of DIY clients that switched to full service during 2022’s down market was not “meaningfully higher” than in 2021’s bull market. 

Another theory for the DIY surge is that many Canadians are curious about the platforms. Investors may be “dipping a toe in the water,” Thompson said — trying out direct investing with a small windfall, for example, but maintaining advised accounts. 

The 2021 OSC survey found that about three-quarters of DIY investors invested entirely on their own while one-quarter had an advisor as well as a self-directed account. 

Heath said that, in his experience, clients either place all their money with an advisor because “they don’t understand the difference between a stock and bond and they would never try to do it on their own,” or they “wouldn’t consider giving money to an investment advisor when they can do it themselves.” He doesn’t have many clients who do both. 

But Thompson said having an advisor and a self-directed account could become more common, and advisors need to adapt. 

She said it’s time to abandon the notion that direct investing is somehow “cheating on” an advisor. The important thing is to not find out only when a client is closing their account. This means regularly asking if there are services a client is interested in that you haven’t discussed, and about accounts they have elsewhere. 

“Typically, if you wait for that moment of transfer, it’s a little too late to have a meaningful and client-centric conversation,” she said.

Of course, the pull of DIY investing could simply come down to cost. 

“In the Canadian market, if you’re fee-sensitive, unfortunately the way our framework is set up, direct investing —whether it’s suitable to you or not — is one of the lowest-fee options,” Thompson said. 

There are structural barriers to traditional advice that predate Covid. With more advisors chasing high-net-worth clients, Canadians with less than $500,000 to invest may be finding it hard to find advisors. 

“They may not be shunning advice. It may just not be available to them,” Gross said. 

While the OSC survey found that 44% of DIY investors chose the self-directed route because they enjoy it, more than one-third said they do so because they see advice as too expensive; another quarter said their portfolio is too small to rationalize having an advisor. 

“The challenge is how to keep people directed toward advice that’s capable, proficient and affordable,” Gross said. 

FP Canada has proposed a refundable federal tax credit to encourage low- and middle-income Canadians to obtain financial planning advice. High earners would not be eligible. 

FP Canada president and CEO Tashia Batstone said the proposal is one way to address the cost barrier to advice. “They get initial exposure to [planning] and understand the value of it,” she said, adding that the organization’s discussions with government were still preliminary.