Study finds advised investors build up to 3.9x more wealth, but access pressures rising that may require regulatory shift
Canada’s investment advice framework has helped millions of smaller investors build wealth, but new analysis suggests the system faces mounting pressure that could limit access in the years ahead.
A detailed report from the CD Howe Institute expands on earlier findings, showing that Canada has not only broadened access to investment advice for households with under $100,000 in assets, but has also delivered measurable long-term financial gains for those investors.
Research cited in the report shows a stark difference in outcomes between advised and non-advised investors. Over time, those receiving guidance accumulated significantly more wealth (up to 3.9 times more in some periods) driven by higher savings rates, better diversification, and a greater tendency to stay invested during market downturns.
“Canada’s system has made limited investment advice accessible to millions of modest investors,” says Paul C. Bourque, author of the report. “That access has real economic value, helping households build wealth and make better financial decisions over time.”
The report defines these “modest investors” as households with less than $100,000 in investable assets; a group that makes up the majority of advised clients in Canada. Mutual fund dealers alone serve about 9.4 million households, with roughly 78% falling into that category.
At the core of Canada’s success is a regulatory model that prioritizes accessibility. A key feature is the country’s unique mutual fund dealer category, which allows firms to operate at lower cost by focusing on a narrower set of products. Combined with front-line oversight from CIRO, this structure has enabled advice to be delivered efficiently across a broad population.
The report says that CIRO’s national oversight framework improves coordination, reduces duplication across provinces, and strengthens enforcement through standardized rules and disciplinary processes. This model has also helped build investor confidence, particularly during periods of market stress when Canadian investors have shown relatively limited withdrawal behaviour compared to global peers.
Investment funds
The growth of investment funds underscores the system’s reach. Assets in Canadian investment funds have surged from $4 billion in 1982 to more than $3 trillion as of 2025, with funds now accounting for roughly half of the $2.1 trillion held in voluntary retirement savings plans.
However, the report warns that access to advice, especially for smaller accounts, is increasingly at risk. Rising compliance costs and industry consolidation are making it harder for firms to serve lower-balance investors, with those holding under $10,000 facing the greatest challenges.
Compensation structures are another critical factor. Canada has largely preserved embedded fee models, which allow investors to pay for advice through product fees rather than upfront charges. Regulators previously considered banning these commissions but ultimately held back, citing concerns that doing so would make advice unaffordable for smaller investors.
Experiences in other markets reinforce that concern. In the UK and Australia, restrictions on embedded commissions have been linked to a widening “advice gap,” where lower-wealth investors struggle to access or afford guidance.
“In simple terms the Retail Distribution Review has achieved its objective of removing opaque charging through commissions and improving the training and qualification of advisors but had – along with a number of other significant developments – contributed to an advice gap opening up for the less well-off and those in need of single event type advice,” said Andrew Bailey, then CEO of the UK Financial Conduct Authority.
More balanced approach
To sustain Canada’s relative advantage, the report calls for a more balanced regulatory approach—one that continues to protect investors while also promoting competition and efficiency. It notes that most financial regulations in Canada are focused on consumer protection, with comparatively little emphasis on fostering growth or reducing costs.
The paper also stresses the importance of rigorous consultation before introducing new rules, warning that poorly calibrated reforms could unintentionally reduce access to advice.
“Canada’s experience shows that well-designed regulation can expand access to financial advice without compromising investor protection,” Bourque says. “The challenge now is to ensure that new rules do not unintentionally reduce that access.”
Beyond investment advice, the report suggests Canada’s model, particularly its use of self-regulation, could offer a blueprint for other sectors such as insurance, though further analysis would be needed to assess feasibility and costs.
