Published: April 21, 2021
The study, Self-Directed Investors: Insights and Experiences, explored several topics relevant to self-directed investors.
In a year defined by the uncertainty of a pandemic, many retail investors became active in the capital markets. The demand for self-directed investment accounts surged so rapidly that some brokerages struggled to meet the demand at times. There was also a dramatic increase in the amount of retail trading activity.
Self-Directed Investors: Insights and Experiences
OSC Investor Office
Published: April 21, 2021
Download the full study
10% of self-directed investors opened their self-directed account during the pandemic
- 50% of self-directed investors have held their self-directed account for 5 years or more.
- 16% of self-directed investors started investing through an advisor due to the COVID-19 pandemic.
- 17% of self-directed investors have had an issue entering or completing a trading order during the pandemic.
- 11% of self-directed investors had issues accessing or logging into their self-directed account during the pandemic.
44% of self-directed investors choose self-directed investing because they enjoy it
- 34% do so because they see advice as too expensive.
- Advised investors who have a secondary self-directed account do it for the following reasons: they enjoy trading stocks (32%). they only want their advisor to manage some of their portfolio (28%), or they want to take more risk (27%).
- Overall, 7 in 10 (69%) self-directed investors are satisfied with their experience as an investor.
11% of self-directed investors have an aggressive attitude toward risk
- Nearly half (45%) are willing to accept a moderate level of risk, while 14% perceive themselves to be conservative.
- Investors with higher risk preferences are more likely to own cannabis stocks, venture stocks and crypto assets.
25% of self-directed investors sign-in to their account daily, 28% sign-in weekly, and 20% monthly
- 21% trade using their mobile phone, 56% using their computer and 11% by phone.
- 43% of investors make 10 trades or less per year, 31% make 11 to 50 trades per year and 10% make 51 to 350 trades a year.
- More than half (56%) say it is very important to know the prevailing buying and/or selling price (bid/ask) when making a buying or selling decision. 38% say it is very important to know the volume (number of shares) available at the prevailing buying and/or selling price.
60% of self-directed investors are men and 26% are aged 18-34
- 74% are self-directed investors while the remaining 26% have an advisor but also have a secondary self-directed account
- 21% have traded cannabis stocks, 19% have traded junior stocks, 14% have traded leveraged or inverse ETFs, 9% crypto assets, and 6% options/puts.
- The most common investment return for self-directed investors over the last year (to December 2020) was 4-6% and this jumps to 7-9% over a three-year period.
About the study: The OSC conducted a survey of 2,000 Canadians investors who either have a self-directed account as their primary account or who have an advisor but also have their own secondary self-directed account between November 17 to December 6, 2020 to further its understanding of retail investor experiences during the pandemic. These findings will be used to inform investor protection and education efforts related to the ongoing pandemic and economic recovery.