Canadian Gen Zs more likely to invest than peers in U.S., China, survey says

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Canadians between the ages of 18 to 25 are far more likely to be investors than their peers in the United States, Britain and China, and parental influence may be a driving factor behind the trend, according to a new survey.

The study from CFA Institute and the Financial Industry Regulatory Authority, which was conducted in the last two months of 2022 and surveyed more than 2,800 investors across the four countries, found that 74 per cent of Canadian Gen Zs held at least one investment. In comparison, only 57 per cent of Gen Zs in China had invested, followed by 56 per cent in the U.S. and 49 per cent in Britain.

“We see a greater interest and more receptivity to investment from Canadian Gen Zs,” said Rhodri Preece, head of research at CFA Institute, a body that certifies and provides education for financial professionals. In fact, the report showed that Canadian Gen Zs were 71 per cent more likely to invest out of a sense of curiosity than their global peers.

The research also showed that 24 per cent of Canadian Gen Zs start investing before their 18th birthday. They’re investing more than their peers in the U.S. and Britain, with median investments of $9,000.

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While experts cite many reasons behind these trends, parental influence may play a sizable role. The report showed that almost three-quarters of Canadian Gen Z investors had parents who talked to them about investing. “You wonder whether there’s an experiential aspect with parents encouraging that behaviour,” Mr. Preece said.

Canadian Gen Zs also have access to investment products that might not be available to others. “A benefit for younger people in Canada versus the States are things like TFSAs, which I think are a big driver to just invest and not pay taxes on your gains as soon as you turn 18,” said Victoria-based TikToker Vanessa Quinn, who shares finance tips with more than 14,000 followers, including a large Gen Z audience.

Different financial goals might also be setting Canadian Gen Zs apart. While 61 per cent of American Gen Z investors cite travel as a major savings goal, 55 per cent of Canadians say monthly bills are a priority, alongside travel.

Gen Zs who are putting home purchases on the back burner might be more open to the risks that accompany investing. “Ninety per cent of young professionals I work with say, ‘I live with my parents so I don’t care right now, I can take a risk,’” said Jee-Woon Ha, a Gen Zer and financial adviser at the Financial Literacy Counsel in Vancouver who also shares finance tips on TikTok.

Mr. Ha’s remarks are consistent with the report’s findings, which show that crypto – a notoriously risky bid – is the most popular investment among Canadian Gen Zs, with 57 per cent holding this asset.

Social channels and “finfluencers” such as Ms. Quinn and Mr. Ha are a potent driving force behind Gen Z’s appetite for investing, the report found. In fact, social media was the leading information source for Gen Z investors in the U.S., Canada and Britain, and the fourth most popular in China.

“Gen Z has been on social media from the get-go and they share everything – finances are no exception,” said Maxwell Nicholson, co-founder of Vancouver-based Bloom Social, an investing and social networking app designed for Gen Zs.

So it’s unsurprising that 41 per cent of Gen Z investors in Canada and the U.S. as well as 43 per cent in Britain and 60 per cent in China invest because of “FOMO” – the fear of missing out, the survey showed.

Despite the surging appetite for investing among Canadian Gen Zs, the report showed that low savings remain a barrier. However, finance experts think this shouldn’t be a deterrence.

“It’s not about the money, it’s about the habit,” said Michael O’Brien, a financial adviser at Sun Life. “Even if you just make 300 bucks weekly and you invest $50 you’ll start a habit and then continue at a larger scale when you have more money.”

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