Majority of Canadians have yet to embrace online investing

Cyberspace remains the final frontier for many Canadian investors.

Cyberspace remains the final frontier for many Canadian investors.

According to the latest BMO InvestorLine survey conducted by Pollara, less than 20% of Canadians use online brokerage services to manage their investments.

Logically, the results are surprising, given that 77% of Canadians use their financial institution’s online banking platforms to do everything from pay bills to monitor their savings and chequing accounts.

But there appears to be a credibility gap over security associated with online brokerages versus a bank’s Internet-banking platforms. Canadians said they were most concerned about online security, which was their main reason for not investing online. That ranked higher than not having enough money or knowledge to invest on their own.

B.C. residents, however, were among the most comfortable with online investing. About 19% said they managed their investments online at least once a month. That’s a bit above the national average but lower than the 23% of Ontario residents who use online brokerage services.

Widespread acceptance of online banking by West Coast residents likely contributes to the higher proportion of online investors in B.C. Nearly nine in 10 (86%) of B.C. respondents to the survey already do their personal banking online, the highest proportion in the country and higher than the national average of 77% of Canadians.

Overall, Canadians are expected to spend more time online over the next few years. The survey suggested that while nearly half expect to spend the same amount of time surfing the net five to 10 years from now, nearly a third of B.C. residents said they would be increasing their time spent online by between 11% and 100% over the next decade.

That can bode well for online brokerage service firms, which could see their market more than triple by 2023.

B.C.’s online investing community is poised to grow the most. While 65% of Canadians said they see themselves using online investment brokerages over the next five years, 73% of respondents in B.C. said they would.

For financial institutions, clearly, their next five-year mission is to seek out these new online investors, helping them to boldly invest where relatively few have done before. •

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