Select Page

Why Millennials Prefer DIY Investing


By Paz Gómez, Frontier Centre for Public Policy

One-third of Canadian millennials prefer going solo when it comes to managing and investing their money. Online financial education and tools are changing the rules of the game and threatening to affect financial advisors how emails affected mailmen.

A recent poll conducted by revealed that 33.7 per cent of millennials prefer do-it-yourself investment, followed by Generation Z—those born from 1997 onwards—with 31 per cent. While millennials value innovation, Gen Zers value being in control of their money. 

As for older investors, old habits die hard. Only 21 per cent of Gen Xers and 11 per cent of baby boomers are ready or are considering getting rid of their advisors. For them, the convenience of letting a professional handle investing and risk-management is the driving factor.

Nicole McKnight, public relations manager at, argues that younger investors “are noticing that these new options for investing for their future takes away a lot of those barriers that existed even a few years ago.”

For most retail investors, financial management is a fixed cost regardless of actual performance. Over the last few years, passive instruments such as broad ETFs have been driving trading and investing fees downwards, evidenced by the rise of zero-commission platforms. 

Digital-service providers have been the big winners amid pandemic-related shutdowns and finance has not been the exception. Neobanks and fintech companies have accelerated the onboarding of customers from all generations. 

Youngsters around the world in particular dipped their toes into the investing world through phone apps. In March and April 2020, U.S. millennials opened more than 780,000 accounts with online brokers. U.S. trading volume in the first half of 2020 increased by 27 per cent, according to an Apex Clearing analysis. 

Triggers varied. Some of them had more time to think about investing and others had extra cash due to reduced consumption or government stimulus packages. In addition, the pandemic panic initially drove stock prices down, making them more affordable for new entrants. 

According to “Investing 2020: New Accounts and the People Who Opened Them,” a University of Chicago report, new investors tend to be younger, lower-income earners and more ethnically diverse. Of the respondents, 66 per cent had never owned a taxable investment account before and about 33 per cent had an account balance lower than $500. 

A straightforward innovation in the financial sector in recent years has been to reduce middlemen. Many actors involved in savings, credit, money transfers, stock trades and pension planning can be replaced by technology-powered solutions.

This trend has resulted in more agile and cheaper services. Moreover, it has increased banking and credit access. The same has occurred with investing: online platforms, along with the emergence of robo-advisors, have made it more understandable, more customizable and more social. 

Users can pick stocks across industries and according to several investing criteria, such as environmental, social and governance (ESG) concerns. Some platforms let users copy trading strategies and portfolio composition and engage with forums to discuss firms and assets. More quantitatively regress platforms specialize in tools to analyze portfolio diversification and assess risks. 

DIY investing forces one to keep track of economic trends, asset performance and new opportunities. In contrast, financial advisors provide only limited data on one’s investments and might not explore alternatives. In general, young people are more willing to take risks and consider fringe options such as crypto assets.

Financial advisors must also compete with a plethora of both free and paid podcasts, tutorials, blogs and social-media forums. To survive the creative destruction, the profession needs to remain competitive and show its worth. 

Not all that glitters is gold and self-investing is not without perils, which go beyond fraud. It requires not only research and training but also psychological traits such as discipline and perseverance. Overconfidence is an often-overlooked handicap.

Financial advisors do provide valuable services. They remove the burden of monitoring one’s portfolio and those who take the time to know their clients well can choose the instruments that best fit their preferences, risk tolerance and time horizons. Moreover, advisors have studied and in many cases are certified to understand complex products and their nitty-gritty. 

Holly Mackay, founder of Boring Money, told Business Insider that online platforms are fine for low sums and straightforward investments. Getting a financial advisor is worthwhile for the big decisions: retirement, pensions and large bets. 

However, to recover lost ground, advisors must specialize on those aspects where apps fall short. Strengthening relationships with customers, providing tiered digital services and demonstrating a willingness to venture outside the mainstream into spaces such as decentralized finance (DeFi) are stepping stones. 

Online DIY investing is here to stay and financial advisors must wake up if they do not want to go the way of the dodo.


Paz Gómez is a research associate at the Frontier Centre for Public Policy.