Why Canadian Investors Are Abandoning the Quick Buck

** Special to the Just Word Blog from Robin Powell, the UK based editor of The Evidence-Based investor and consultant to investors, planners & advisors **

Engineered, Not Accidental

You opened that account with genuine intentions. You weren’t gambling; you were investing. But the platforms engineered this behaviour shift. The social feeds amplified it. The influencers profit from it.

In April 2025, the Ontario Securities Commission (OSC) published research that should alarm every retail investor. Of 655 surveyed Canadians, 35% had made financial decisions based on finfluencer advice. Those who acted faced 12 times higher likelihood of being scammed and 2.3 times larger losses.

This isn’t anecdotal. It’s measured.

The Evidence Piles Up

The Professional Standard

In the first half of 2025, 69.7% of professional Canadian equity fund managers underperformed the S&P/TSX Composite, according to the latest SPIVA scorecard on active fund performance. These people have research teams, Bloomberg terminals, decades of experience. Over ten years, the report shows, the underperformance rate climbs to 97.6%. Small and mid-cap funds? Every single one underperformed in the first half of 2025.

If professionals with every advantage can’t beat the market, what chance does speculation have?

The TFSA Devastation

Your TFSA isn’t just another account. It’s the most powerful wealth-building tool the government offers. If you’ve accumulated $102,000 in contribution room at age 30, that space could shelter decades of tax-free growth.

Lose $10,000 speculating inside your TFSA, and you’re not just losing capital. At 7% annual return over 30 years, that $10,000 becomes $76,123 — completely tax-free. You cannot re-contribute the room. The loss is permanent.

The risk extends beyond lost opportunity. The Canada Revenue Agency watches TFSA trading patterns. Frequent, high-volume trading can be characterized as business activity. If the CRA successfully argues your activity constitutes business, the tax-free status vanishes.

Even “commission-free” trading bleeds wealth. Bid-ask spreads on Canadian stocks run 0.5% to 1.5%. Currency conversion adds more. The psychological tax (cognitive load, relationship strain, sleep lost) never appears on statements but compounds daily.

The Machinery of Distraction

The answer isn’t stupidity. It’s design. These platforms hired behavioural psychologists. They A/B tested the dopamine hits. They know what they’re doing.

Wealthsimple Trade greets purchases with confetti: literal slot-machine psychology embedded in investment software. “Trending stocks” lists manufacture fear of missing out. Real-time tickers create false urgency. One-tap trading removes friction. Push notifications alert you “Tesla is moving!” as if noise were signals.

This platform layer feeds the influencer layer. TikTok’s #FinTok has 5.6 billion views. Instagram overflows with “day trader” posts (always green days, never red). Reddit’s WallStreetBets treats speculation as performance art. YouTube thumbnails package survivorship bias as education.

These aren’t separate problems. They’re one system designed to maximise your trading frequency. Platforms surface trending content. Influencers promote those trends. Activity increases. Platforms profit. Repeat.

The Canadian Securities Administrators’ 2024 Investor Index documents the penetration: 82% of Canadians aged 18 to 24 now use social media for investment information. Among all investors, 53% do (up from 35% in 2020). Nearly half report encountering investment opportunities via social media, a 17-point jump since 2020.

When your platform looks like a slot machine and your feed looks like a trading floor, that’s coordination.

The Systematic Alternative

The data points to a different path: systematic investing built for decades, not days. Not sexy. Not exciting. But it works.

What ‘Systematic’ Actually Means
Systematic investing rests on five principles:

Diversified, not concentrated. Not ten stocks but ten thousand. Not one sector but all sectors. Not Canada-only but global. Exchange-traded funds spread risk across markets.

Rules-based, not mood-based. Asset allocation determined by risk tolerance, time horizon, and goals (not Reddit trends). Rebalancing triggered by percentages, not panic. Decisions made by framework, not Facebook.

Rebalanced systematically. When equities run up, trim back. When they fall, buy more. Automated contrarianism: selling high and buying low without requiring willpower.

Cost-conscious. Every 1% in fees means 1% less compounding. Over 30 years, a 1% fee difference translates to roughly 25% less wealth. Low-cost ETFs (0.15% to 0.25% MERs) versus active funds (1.3% average) deliver structural advantage.

Tax-optimized. TFSAs shelter growth assets for maximum tax-free compounding. RRSPs can hold US dividend stocks to benefit from withholding tax treaty exemptions. Non-registered accounts can hold Canadian dividend payers to access the dividend tax credit. First Home Savings Accounts offer triple tax advantages.

In the TFSA, RRSP and FHSA, Canada offers three of the world’s most powerful tax shelters. Used correctly, they’re wealth-building engines. Used for speculation, they’re fuel for losses.

Why This Requires Human Guidance

Here’s the problem with pure robo-advisers: the algorithm executes perfectly, but you don’t.

Three gaps algorithms can’t fill:

Behavioural coaching. In March 2020, robo-advisers rebalanced flawlessly, buying equities as they cratered. Many clients panic-sold anyway. A human portfolio manager talks you off the ledge.

Tax complexity. Algorithms handle rebalancing. They don’t handle RRSP meltdown strategies, income-splitting timing, or when to trigger capital losses. These require judgment.

Life-change navigation. Career changes, inheritances, divorces don’t fit pre-programmed decision trees. They require conversation.

The evidence points to hybrid: systematic execution plus human judgment.

How Justwealth Delivers Both

Justwealth combines both: systematic, ETF-based portfolios managed by dedicated portfolio managers (not customer service reps, but actual PMs with fiduciary obligations).

What you get:

• Evidence-based asset allocation tailored to your risk tolerance, not trends
• Automatic tax-loss harvesting in taxable accounts
• Unbiased ETF selection with no proprietary funds
• Your own portfolio manager — a real human you can call
• 80-plus portfolio options for genuine customization

The alignment matters. Justwealth operates under fiduciary duty, legally required to act in your interest. No trading commissions means no incentive to churn. No proprietary products means uncompromised recommendations.

The cost: 0.50% management fee under $500,000, dropping to 0.40% above. Add ETF costs of roughly 0.20%, and all-in runs approximately 0.70% (well below the 1.3% average for active funds). Minimum to start: $5,000 for most accounts, lower for RESPs and FHSAs.

The Honest Trade-offs

You give up excitement. You give up bragging rights. You give up the fantasy of 10× returns in three months. You give up checking your phone 73 times daily.

You gain compounding. You gain tax efficiency saving thousands annually. You gain sleep. You gain relationships unburdened by financial stress. You gain roughly 100 hours yearly not spent researching trades.

Getting rich slowly isn’t a concession. It’s the only strategy that works consistently.