3 million Canadians plan to stop working with an advisor in 2021

Survey reveals one in three millennials want to go it alone, or are seriously considering it

3 million Canadians plan to stop working with an advisor in 2021

About one in 10, or 3 million Canadians, say this is the year they will stop working with a financial advisor to manage their investments, according to the latest research from financial comparison site Finder.com

When you include those seriously considering it, the number jumps to one quarter or 7.8 million Canadians. The report also shows this dramatic shift in investor behaviour is mostly generational. Nearly three times as many millennials plan to stop working with their financial advisor as opposed to hiring one in 2021. Compare this to Boomers, the only age group where more people said they would hire an advisor, as opposed to fire one.

A third of (33.7%) millennials plan to stop working with their financial advisor or are seriously considering it in 2021, versus just 11% of boomers who say the same. 

While age was the biggest factor in this shift, gender also played a role. Slightly more men (30%) are either ditching or going to ditch their financial advisor, as compared to just 20% of women. The only real gender difference into why this gap exists is that men tend to feel more knowledgeable about their investments (29% vs 22% for women).

The most cited reasons for dropping a financial advisor were ‘saving money on fees’ (54%) and ‘having more control over my money’ (42%), followed by one quarter of Canadians (25%) saying they ‘feel knowledgeable about how to meet their own investment goals’ and ‘not wanting to ask someone to make investment decisions’. 

Surprisingly, convenience was only a factor for a little over 1 in 10 (21%) of Canadians, making it the lowest ranked reason for why people would stop using an advisor.

Nicole McKnight, PR Manager at Finder.com, says there has been a global shift in investor behaviour during the pandemic and Canadians are no exception to this. 

 “Our research shows this global DIY investing boom is absolutely driven by Canada’s youth looking for a new way to invest and manage their money - and for about half of Canadians under the age of 40, the driving forces are to save money on fees and to have more control over their money.

 “It’s understandable that Canadian’s want to save on fees to ensure more of their money is working for them BUT it’s very important to avoid some rookie mistakes — because despite recent hype in the stock market — it’s not true that stocks ALWAYS go up.”

 “Get educated before deciding you are ready to manage your investments on your own - basically get a real understanding of the risks involved and sound investment strategy, rather than getting caught up in momentary hype.”