The Upside: EXCLUSIVE – An inside look at how young Canadians are investing

[00:00:22] Emily Anonuevo: Hello and welcome to The Upside. I'm your host, Emily Anonuevo. Here on The Upside show we share investment tips and insights all in an effort to help you make the most of your money. Our next generation of investors, our young investors, are trying to do just that, invest and grow their money. Reaching key financial milestones, searching for alternative ways to invest are all on the radar of young people, what unique challenges do young investors face in their financial journey? Today we welcome a panel of Fidelity experts who will share trends and insights on what exactly influences young investors. A warm welcome to Kelly Lannan, Senior Vice President of Emerging Customers at Fidelity Investments out of Boston, and from Fidelity Canada, Sarah Mocherniak, manager of channel growth for Investly, and Audrey Kim, senior ETF capital markets investment analyst. Ladies, thank you so much for being here. I'm so happy we got to have a chance to sit down and talk. I'm so happy to have you here.

[00:01:17] Kelly Lannan: And us in person too.

[00:01:21] Emily Anonuevo: It's been so many years but we're actually meeting in real life. Thank you so much for taking time to come from Boston to Toronto to do this. Kelly, we're gonna start with you. Let's just get straight into it in terms of investing trends and insights you're seeing from your research in terms of the American investors. What are you seeing? Then we'll sort of dip into the Canadian trends.

[00:01:46] Kelly Lannan: Of course. As a reminder, up here from the U.S. [indecipherable] so we'll kind of stick to that. I think the good news is that over the past couple of years we've seen younger folks more and more interested when it comes to investing. We're continuing to bring in more younger customers to Fidelity. Last year was one of our best years yet in terms of acquisition. In terms of those bringing in this population also does continue to get younger. Over 40% of those younger individuals coming into Fidelity are under the age of 25, which is great to see that these are people who are getting started earlier in their investing journey. Not only are they coming into the firm but we're continuing to grow them as they're starting to invest, they're opening up a second product, they're asking us questions, they're engaging with us on social. Overall it's really good to see.

[00:02:32] I think you kind of alluded to it as well in terms of investing trends. We do know that our next generation, they are more interested in alternative products, like digital assets more so than those who are a little bit older. In fact, a lot of younger people, the expectation is working with firms like Fidelity, talking to advisor, that they're able to talk about alternative investments in terms of their overall portfolio. Although they're still investing in individual securities and mutual funds and ETFs, we have to remember those ETFs, of course, we are seeing trends differ just a little.

[00:03:04] Emily Anonuevo: We know that their interest is growing at a young age, as young as 15, 16, 17 years old. Sarah, I'm gonna turn to you in terms of the Canadian stats. A recent Ipsos study on young Canadians, young investors, are saying that young people interested in maybe more saving than knowing what to invest in. It's growing until the age of 25. They want to save for travel, save for a house, all those types of things. What are you seeing from that study?

[00:03:33] Sarah Mocherniak: Thanks, Emily. I think really similar to what was already mentioned but they are looking for a digital-first approach and I think also super mindful about low barriers of entry. We're also seeing on the Canadian side they want engaging promotional and incentive programs to get them started. That's something we're thinking a lot about internally. Lastly, I think just convenience. It needs to be something that's at their fingertips, able to be easily accessed. When it comes to the teen audience, it's really interesting. There's a lot of mixed emotions I would say that we saw from the study on saving versus investing. I think that there's still, with the teen group, more negative connotation along with investing and to me that tells us we need to engage in more educational content and get the word out there about the importance of starting early. Those are a few things I would mention we saw from the study.

[00:04:25] Kelly Lannan: Do you know what's interesting?  I don't know if you're seeing this as well, obviously investing is on their mind but a lot of younger people, they're not just interested in investment management but their full financial picture. They're looking at firms who can do that in the context of everything they care about with their money, not just investing but saving for the short term like going away, maybe something that's longer term which I think is a good thing. Money is much more holistic than just your investments.

[00:04:51] Emily Anonuevo: Very, very good point. Like Sarah mentioned, I think there's an opportunity here to really educate at a younger age and maybe through their financial advisors, maybe through the family because we know from the Ipsos study that they are still turning to family members for financial advice, for financial guidance. Audrey, you are part of Fidelity Canada's Money Gain series, a financial series for young people. How was it being part of that and why is it so important, that series, for financial literacy?

[00:05:21] Audrey Kim: A ton of fun, it was a ton of fun. For those that don't know, Money Gains is a series that Fidelity has put together that puts together ... it's a bunch of videos on essentially the ABCs of investing. It's available in both English and French on fidelity.ca and on YouTube. It takes you through everything from saving to budgeting to how compounding works, how equity markets work, how markets behave in the different business cycles. It's a really, really good resource, free, accessible to ... not only for, I would say, teens or new investors but also for parents. To your point, we saw in the Ipsos studies that young investors or young Canadians often lean into their family for not only financial advice but information on their finances. It's a great resource for just either brushing up on some of your investing knowledge, whether it's to have those discussions with your children or just for [indecipherable] just to understand how things work.

[00:06:21] Kelly Lannan: You know what's interesting, we've seen the same in our study, now information is everywhere. Everyone goes to social, we all pay attention there, but no matter why younger folks are still telling us that the number one place they're gonna go is through the trusted family members in their life, whether it's a parent or a relative. You said something that resonated so much, Audrey, is that all the education we put out for teens we ask the parents, what did you think, did your teen like it? They kind of pull us to the corner and they're like, I benefited from it too. It's just so apparent that we are helping them build confidence. When Fidelity, or Fidelity Canada, can't be in the room their parent is there. By us helping to build the teen confidence, the parent confidence, we can really grow our future generation of investors.

[00:07:05] Emily Anonuevo: Let's talk a little bit more about certain resources that young people can turn to. Let's talk about social media and just the impact about that. I mean, we could go on forever about it but what are some of the unique challenges facing young investors and maybe leaning towards social media for further financial education. Any challenges there?

[00:07:24] Kelly Lannan: First, let me start by saying, and I'm sure you all feel this way too, now with social being prevalent, and someone who is not even familiar with our industry on Monday could have a completely different job and then on Tuesday decide they want to be a FinTalk star. I think Fidelity really feels like it's our responsibility to make sure we are showing up in these channels, list goes on on what they are, in order to provide that financial education. We are the financial education experts so not only do we feel it's our responsibility but on the flip side it's also our responsibility to show up in the ways that is demanded of the next generation. They don't wanna listen to, I mean, we probably already talked too long but they don't want to listen to a 40 minute lecture. Quick, short and sweet. We've really embraced that. I think some of the challenges are going to what I just said. You have so much out there that it's often time to figure out, well, what's most important? You have people out there who maybe don't know what they're talking about. By us being there I think we can also help to push back against some of those challenges in a responsible way.

[00:08:27] Emily Anonuevo: Absolutely. We've got Money Gains that they could turn to. Sarah, I want to turn to you quickly, talk about Investly, another great resource, another great product from Fidelity Canada. What's Investly all about?

[00:08:39] Sarah Mocherniak: I love it. I thought you'd never ask. Investly is a really exciting initiative for Fidelity Canada. We launched an investing app July of 2024.

[00:08:51] Kelly Lannan: Congrats. That's so exciting.

[00:08:51] Sarah Mocherniak: Thank you. There's a huge team here that is a part of it. It's been a really exciting milestone for us. In a nutshell, Investly is a simple to use investing app designed for first-time investors, exactly a lot of the audience that we're talking about with young Canadians, but also not necessarily young, to your point. There could be people in other demographics that are first-time investors that can absolutely benefit from it. It's a really seamless investment account opening experience that was really important for us and also has an educational component within the app with short-form video, to your point. Although we're absolutely still on social media with that type of content we also wanted a place within the app where people could grow and educate themselves and continue their learning. I'm really excited about it. You can find it anywhere kind of on Google and Apple stores.

[00:09:40] Emily Anonuevo: If I'm correct, one of the product offerings in that app is the All-in-One ETF, right?

[00:09:46] Audrey Kim: I thought you'd never ask that.

[00:09:47] Emily Anonuevo: Exactly, Audrey, segue to there. Talk about why young people are so drawn to exchange-traded funds and why that's a vehicle that they're looking to.

[00:09:56] Audrey Kim: You know what? I think there's many answers but one is really the fact that it's simple and it's easy. I'd like to say that there's no one-size-fits-all when it comes to investments for younger Canadians or young investors or new investors but I would say All-in-Ones are pretty close. I'd caveat, I'm in ETFs and I was involved with All-in-One ETFs, but really these All-in-One ETFS are a diversified portfolio with a variety of different asset classes. That could mean stocks, bonds, crypto assets, and the diversification and stock selection is done for you. All you have to do is just contribute, rebalancing is taken care of for you, stock selection, geo allocation, it's all done for you and you just pick the All-in-One that best fits with your risk tolerance and your stage of life.

[00:10:49] Emily Anonuevo: Amazing. We're gonna roll into the last few questions here. We could talk on and on about this topic. I guess to maybe the parents who are watching, to the new investor who's watching, where do they start? Is it looking into these investment vehicles? Is it going back to the fundamentals? Kelly, what are sort of the common issues and concerns and questions you hear from young investors?

[00:11:09] Kelly Lannan: I think you hit the nail on the head. They just don't know where to get started. What I loved hearing, and it's interesting, we hear this with younger folks, we also hear this with women, is that if we just made it easier for them they would be far more likely to get started. If there was a step-by-step comprehensive way to get started they would be all in and [indecipherable] would help them build the confidence. I think some of the first things that we always say is what are the goals? We talked about how investing is so tied in with your overall financial picture. We all have goals. We all have things that we care about whether that's retirement or buying a new home or saving for your child's education. I always say start there.

[00:11:45] Think about what your goals are and that can really help decide the account that you want to take. It's taking a step back and thinking about the risk and what your risk portfolio is because that can help determine what you then put into the account. You can't have an empty cookie jar. That's what I always say. You have to pick the cookie jar but then you've gotta put something in it. After that, based on your time horizon, that can really help you get started. When all else fails ask people. Come to us. We all work in the Fidelity kind of ecosystem. We are here to help whether that's on social, online, through our advisors but I think that's also a good step.

[00:12:17] Emily Anonuevo: And young people are turning to their family, to their parents for financial guidance. Where can we branch off of that, Sarah and Audrey? What do you think young investors can do with that?

[00:12:27] Sarah Mocherniak: We've mentioned a few important stats related to the teen audience. The teen audience is something that Investly is absolutely interested in learning more about. How do we engage with them? Money Gains is a great kind of segue to get in front of them. I love what you said, Kelly, about the goals and the risks because that's actually within the Investly app at the very beginning of your journey, setting up a goal, filling out a risk profile questionnaire. We do a lot of that heavy lifting for you so another wonderful place, I think, to get started.

[00:12:55] Emily Anonuevo: Audrey, anything to add?

[00:12:57] Audrey Kim: Kelly already alluded to it but just start asking questions and get started. I personally believe knowledge reduces fear. Access those free resources out there whether it's through Investly, through Money Gains or other resources that you see. I would say trusted resources and those that are backed by folks that can actually comment on those topics. Get started, and I feel that when you understand financial concepts you're empowered to make smarter decisions and those decisions sooner. You actually said something about four years ago when we worked on a panel together. You said, young people...

[00:13:31] Kelly Lannan: By the way, I love how you remember what I said. I'm totally into this.

[00:13:34] Audrey Kim: It really resonated with me. Back then I'd like to consider myself part of that group. It really resonated with me. You said young people like to be in the driver's seats of their investments. I was like, that couldn't be more true. The thing is, although we want to be in the driver's seats of our investments we kind of feel held back or we're not empowered or don't feel confident enough yet to do so because we lack the education and the knowledge to be in that position. Tet yourself in a position where you can be in control, you can be more confident about your finances. Even if you do decide that working with a financial professional is better for you, at least with that knowledge it can be a two-way discussion rather than a one-way. You can participate in some of those goal settings and how you want to see your investments grow.

[00:14:21] Emily Anonuevo: Absolutely. Empower yourself. It's never too late. Empower yourself through education, different resources and different perspectives. Audrey, Sarah, Kelly, such a treat to have you all in the studio today to talk about this. What a wonderful time. Thank you so much.

[00:14:34] Kelly Lannan: We're available whenever you'd like us so thank you so much.

[00:14:38] Emily Anonuevo: Thank you so much for tuning in. For more Upside content just go to our YouTube Fidelity Canada page for our full episodes. Thank you so much for watching. I'm Emily Anonuevo.