OSC Study: Ontario’s millennials face barriers to investing

A new study by the Ontario Securities Commission has found that many millennials often face significant obstacles when considering investing.

The study, which was published as part of “OSC Staff Notice 11-782, Getting Started: Human-Centred Solutions to Engage Ontario Millennials in Investing,” looks at how stakeholders can develop and refine products, programs, and services to help millennials overcome barriers to investing.

The study was conducted over the course of two weeks in February 2018, when the OSC conducted 90-minute in-depth interviews with 18 Ontarian millennials. The OSC also engaged a small group of industry participants to provide feedback on the study’s initial insights.

According to the study, many millennials are at a challenging stage in life where they find it difficult to picture their future self, often compare themselves to their peers, and lack the opportunity to practice their investing skills.

“Millennials are deeply affected by their perceptions of where their peers are at,” the report reads. “These social comparisons can serve as useful reference points as long as they are relevant and don’t feel out of reach.”

“For millennials to make financial trade-offs between the present and the future, they need to know what’s in it for them.”

When it comes to key principles that stakeholders can consider when looking to engage millennials in investing, the OSC study found that it’s important for stakeholders to help millennials find their own unique motivation for investing; provide personalized and achievable steps to make it easier to start investing; and demonstrate a clearer vision of how current decisions impact future consequences.

“For millennials to make financial trade-offs between the present and the future, they need to know what’s in it for them,” the report reads. “Instead of making assumptions about millennials’ motivations or the life milestones they have in mind, help individuals identify their own motivation and engage from there. When millennials discover their motivation and can see investing as relevant to them they are more likely to engage.”

Other principles that stakeholders can consider include offering relevant social comparisons to show what others are doing and creating opportunities for low-risk experimentation to help build millennials’ confidence.

“Experimentation can build confidence in the investing process. In the absence of opportunities to test and learn, those with little or no knowledge of investing fear loss to a degree that is a barrier to investing,” the report reads.

“Experimentation can build confidence in the investing process.”

Overall, the OSC’s study suggests that millennials face signficant barriers that make it harder for them to decide whether investing is right for them, which is why it’s important to have conversations about how stakeholders can better engage millennials in investing.

“The aim of design principles is to start a conversation about how programs, products and services might be delivered in more human-centred ways that will better engage millennials in investing for their future,” the report notes. “They are intended to inspire stakeholders in all parts of the investing ecosystem – from investment firms, to organizations delivering investor education, to FinTech startups and others – to test new models, observe how their users respond and continue to learn and adapt.”

Last week, the OSC released a study that found that while five percent of Ontarians (approximately 500,000 people) own cryptocurrencies such as Bitcoin and Ether, mthough any of those Ontarians don’t understand enough about them.

Photo via Unsplash.

Amira Zubairi

Amira Zubairi

Amira Zubairi is a staff writer and content creator at BetaKit with a strong interest in Canadian startup, business, and legal tech news. In her free time, Amira indulges in baking desserts, working out, and watching legal shows.