There is a large gap when it comes to investing motives of Gen Z newcomers and their Millennials counterparts. The former is much more likely to prioritize quick gains over steady, long-term returns. This is reinforced by just the third of Gen Zers citing saving for retirement as an investing motive, compared to the nearly half of Millennial new Canadians. This Gen Z group is one that is highly likely to still be in university, and not giving as much thought to the long-term impacts of their investing decisions as an older Millennial that is more likely to be starting a family, buying a home for the first-time, etc.
With such contrasting investing motives, largely driven by life stage, brands must be flexible in meeting these investors where they are. Partnering with universities to provide younger newcomers a more stable and less-risky outlook on investing will be beneficial for this group’s long-term financial wellness. For older, wealthier newcomers, advisory and wealth management services are likely to remain an effective acquisition gateway.
This report looks at the following areas:
- Market drivers impacting the investing industry
- New Canadians’ investing profiles
- Investment ownership
- Investing barriers and motives
- Channels used for investing advice/managing investments
- New Canadians’ attitudes toward investing
Brands must support new Canadians' investing efforts by offering tailored financial education and accessible resources that empower them to build their wealth.
Amr Hamdi, Senior Analyst – Financial Services
Market Definitions
For the purposes of this Report, Mintel has used the following definitions:
- Newer Canadians: people who have lived in Canada for less than 10 years
- First-time investors: those that acquired their first investing product less than a year ago.
- Intermediate investors: those that acquired their first investing product over a year to five years ago.
- Seasoned investors: those that acquired their first investing product over five years ago.
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Executive summary
- What you need to know
- Consumer trends: key takeaways
- Affordability, security, and customer service are the core standard newcomers have when choosing an investment platform
- Graph 1: key factors in choice of investment platform, 2024
- Partner with universities to reach student investors on a more effective level
- Anxiety over investment decisions tends to go down with age, but still remains elevated
- Graph 2: attitudes toward investing, by generation, 2024
- Market predictions
- Opportunities
- New Canadians desire personalized educational content to support their investing endeavors
- Refer-a-friend bonuses can boost acquisition among newcomers
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The Market
- Market drivers
- Newcomers remain a significantly attractive growth segment for investment brands
- Graph 3: distribution of foreign-born population by region of birth, 1996-2036 (projected)
- A high rate environment will continue to stimulate demand for interest-bearing investment products
- Graph 4: policy interest rate over time, 2022-24
- Prices rose at an annual pace of 2.7% as of April 2024, indicating a continued retread across inflation towards target levels
- Graph 5: consumer price index, 12-month % change, 2023-24
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Consumer Insights
- Consumer fast facts
- New Canadians' investing profiles
- New Canadians are a young group, with nearly 40% currently students
- Graph 6: new Canadians breakdown, by gender, age and student status, 2024
- Newcomers are in tighter financial positions, given their youth
- Graph 7: new Canadians breakdown, by financial situation, 2024
- Mutual funds and stocks are the most owned assets by newcomers, but their overall investing participation is lagging
- Graph 8: investment ownership, by new Canadians, 2024
- Nearly half of new Canadians began investing within the past year, while just 10% have been investing for over five years
- Over half of new Canadians aged 18-34 are categorized as first-time investors
- Graph 9: new Canadians' investing experience, by age, 2024
- Investment ownership
- New Canadians' investing participation eventually increases with time
- Graph 10: investment ownership, by length of time in Canada, 2024
- Nearly a quarter of new Canadians hold crypto
- Graph 11: cryptocurrency ownership, by new Canadians, 2024
- Barriers to investing
- Fractional share ownership remains an optimal solution for new Canadians contemplating investing but held back by limited funds
- Graph 12: barriers to investing for new Canadians, 2024
- Millennial newcomers feel the most constrained by a lack of funds when looking to invest
- Graph 13: barriers to investing for new Canadians, by generation and length of time in Canada, 2024
- Investing motives
- New Canadians invest to ensure their long-term financial security
- Graph 14: new Canadians' investing motives, 2024
- Gen Zers and Millennials have largely contrasting investing motives
- Graph 15: new Canadians' investing motives, 2024
- Channels used for investing advice
- New Canadians leverage diverse sources for investing advice
- Millennial newcomers leverage financial advisors for investing advice, while Gen Zers prefer social media
- Graph 16: channels new Canadians use for investing advice, by generation, 2024
- Channels used to manage investments
- Self-directed brokerage accounts and financial advisors are the two main channels used by newcomers to manage their investments
- Graph 17: channels new Canadians use to manage investments, 2024
- FIs' advisory arms can do more to retain the investing businesses of their newcomer customers
- Graph 18: new Canadians' use of financial advisors to manage investments, 2024
- Attitudes toward investing
- New Canadians' desire for educational content is significant
- Graph 19: new Canadians' interest in dedicated educational resources, by student status, 2024
- Not all new Canadians are confident in their ability to retire comfortably
- Graph 20: new Canadians' retirement comfort levels, 2024
- Over half would bundle multiple financial products – opening doors for brands to offer more holistic newcomer packages
- Graph 21: new Canadians' interest in bundling financial products, by gender and age, 2024
- Half of new Canadians prefer saving/GICs to investing in the current market
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Competitive strategies
- Marketing and advertising
- Wealthsimple leverage cash bonuses as part of its acquisition marketing
- RBC stress the "low-cost, low-effort" benefits of using its roboadvisory service
- BMO reminds customers of the diverse channels they are able to obtain investing advice from
- RBC's dedicated newcomers page is a best-in-class example when it comes to engaging with this segment from an advisory standpoint
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Appendix
- Market definition
- Consumer research methodology
- Generations
- Abbreviations and terms
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