New OSC Study Finds Ways to Encourage More Millennial Investors

16 July 2018

By Uri Snir

In response to its November 2017 empirical study, entitled Missing Out: Millenials and the Markets (which I previously summarized here), the Ontario Securities Commission (OSC) has released a further study.


The Missing Out study found that over 80% of millennials in Ontario were saving, but only 47% were investing. The new study, entitled Getting Started: Human-Centred Solutions to Engage Ontario Millennials in Investing, seeks to explain the barriers to investing that many millennials in Ontario face, and how various stakeholders can develop and refine products, programs and services that respond to millennials’ needs.


Key Highlights from the Study: The OSC worked with a consulting group, over the course of two weeks in February 2018, to conduct 90-minute in-depth interviews with 18 Ontarian millennials, each of whom is employed full-time and either had some early experiences with investing or was on the cusp of being able to do so. Here are the main findings from those interviews:

  • Many millennials are at a stage in life where it is difficult to picture one’s future self, and investing feels like something that limits one’s freedom to try on new identities and experiences;
  • Millennials are deeply affected by their perceptions of where their peers are at. Social comparisons can serve as important reference points for setting and acting on financial goals, as long as they feel relevant and don’t feel out of reach;
  • Investing feels overwhelming if there is no clear way to take the first step. Paralysis over having too many options is exacerbated by industry practices that evoke skepticism and undermine trust;
  • 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 study also examined relevant literature from the behavioural sciences and the existing industry landscape. The literature review found that behaviour change requires motivation, ability, and an appropriate trigger. Individuals tend to be less motivated to take action when the potential benefits of that action are uncertain and distant in time. Individuals find complex, unfamiliar environments, like investing, to be overwhelming and discouraging. Lastly, developing triggers is difficult because the behaviour one hopes to encourage depends on an individual’s circumstances.


Design Principles for Stakeholders: The OSC relied on the above findings to develop six “design principles” for how stakeholders can better develop and refine programs, products and services to meet the needs of millennials. The design principles are as follows:

  1. Prompt millennials to identify their own unique motivation for investing and validate that motivation in a non-judgmental way: when millennials discover their motivation and can see investing as relevant to them, they are more likely to engage.
  2. Meet millennials where they are by providing personalized, achievable steps that make it easy to get started: the absence of a clear starting point triggers choice overload and becomes a substantial barrier.
  3. Lengthen perspective by making the future consequences of current actions feel more concrete: draw attention to longer-term considerations by connecting the impact of current decisions to future consequences.
  4. Curate aspirational social comparisons to promote achievable investing habits: data points that are tangible and visible, such as buying a home or travelling, can increase motivation to engage in long-term investing.
  5. Allow for low risk experimentation, reinforcing early learnings with feedback that builds confidence and motivates continued progress: millennials crave regular reinforcement that the steps they are taking are having the expected result.
  6. Inspire trust by putting the user’s needs first: millennials are very focused on getting advice from people who have their best interests in mind, and are not perceived as having anything to sell. There is particular skepticism about business models where an individual is perceived to be deriving some type of personal benefit from a sale. For example, branch staff were generally perceived to be less objective and transparent than robo-advisors.


The Takeaway: The study mostly focuses on the psychological make-up of millennial investors. Although much of the advice given is quite general, it is clear that millennials lack trust in the investment industry.


The study attempts to inspire various stakeholders – from investment firms, to organizations delivering investor education, to fintech startups and others – to test new models, observe how users respond, and continue to learn and adapt. Professionals in the industry should use these findings to help them build mechanisms that increase both the motivation and ability of millennials


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