April 2025

This month, we’re highlighting two critical issues affecting Canadian investors: fair complaint-handling and the challenges of do-it-yourself (DIY) investing. First, we delve into the shortcomings of our complaints system, and advocate for empowering the Ombudsman for Banking Services and Investments (OBSI) with binding decisions. Next, we explore the evolving landscape of DIY investing, stressing the need for stronger protections and clearer rules for investors who manage their investments independently. Read on to discover more about these pressing issues and our ongoing efforts to champion a fair financial system for all Canadians!

Levelling the Playing Field: The Push for Fair Investor Compensation

In Canada, investment firms can refuse to compensate harmed investors—even when OBSI recommends it. Because OBSI cannot make binding decisions, firms can pressure clients into low settlements, leaving many investors shortchanged. For the first time, OBSI’s 2024 annual report includes data on these unfair investment case outcomes. It speaks volumes about how the lack of binding authority harms investors.

Between 2019 and 2023, 33 cases resulted in investors receiving a staggering $1.1 million less than OBSI recommended. When recommended compensation exceeded $100,000, half of those investors settled for an average of 44% less than they deserved. In 2024 alone, two cases left investors nearly $300,000 short.

These shortfalls can seriously affect the financial and emotional well-being of ordinary Canadians and erode their trust in our regulatory framework.

Binding authority would prevent these harmful practices. It would boost confidence in the complaint-handling system, ensuring investors get the compensation they are entitled to.

In November 2023, the Canadian Securities Administrators (CSA) proposed giving OBSI the power to make binding compensation decisions. This is an essential step toward protecting investors and aligning Canada with international standards. FAIR Canada and consumer advocates fought for this change for more than a decade.

Unfortunately, some in the financial industry are trying to weaken or delay the reform. They are uncomfortable with levelling the playing field between investment firms and investors because firms benefit from the imbalance. They want to maintain their unfair advantage. We must not let that happen.

That’s why FAIR Canada and a coalition of consumer advocates are calling on governments, the CSA, and the Canadian Investment Regulatory Organization to stand with investors.

Stay tuned as we continue our efforts to ensure accountability and a fair financial system for all Canadians.

Investing Without Advice: DIY Investors Need Better Protections

More Canadians are choosing DIY investing instead of working with an advisor. According to research by the CSA, 45% of investors now have a DIY account, and those using an advisor have dropped to their lowest level in 18 years (61%).

DIY investors use discount brokers, known as order-execution-only (OEO) dealers. Unlike full-service brokers, OEO dealers are legally barred from giving their clients advice. However, OEO dealer platforms offer various digital tools, such as model portfolios and research reports. Although they can’t offer advice, a recent FAIR Canada survey found that over 75% of investors believe at least one of these tools amounts to investment advice.

As the industry evolves, the shift towards DIY investing challenges rules built for investors who get advice—not those investing on their own.

What legally qualifies as investment advice?

The Canadian Investment Regulatory Organization (CIRO) recently consulted stakeholders, including FAIR Canada, to help guide OEO dealers on this issue. The consultation focused on what OEO dealers can offer their clients without breaking the rules against providing advice.

With DIY investing on the rise, CIRO should examine DIY investors’ experiences more broadly to support them in making sound decisions without offering advice.

Here are the key issues to consider:

Confusing Account-Opening Information and Documents

OEO dealer account-opening documents are often long, legalistic, and hard to understand. Many investors struggle to understand complex financial language. We recommend clients receive clear, plain language information in all documents.

Inadequate Appropriateness Obligation

OEO dealers must determine whether it is appropriate for an investor to open a DIY account. However, opening a DIY account is inappropriate only if:

• The person lacks the skills to conduct online activities.



• The person seeks investment advice.

This oversimplifies real investor needs. We suggest potential clients must complete an investor knowledge quiz before opening a DIY account, especially higher-risk accounts (e.g., margin accounts or more complex products). The quiz would help ensure clients understand basic investing concepts and promote better financial outcomes.

Risky Digital Engagement Practices

Digital engagement practices (DEPs), such as top-traded lists and copy trading, can affect investor behaviour and lead to poor outcomes. We suggest that CIRO:

• Prohibit OEO dealers from using DEPs that have been shown to harm investors.

• Provide DEP guidance focusing on areas of concern, conflicts of interest, and positive uses of DEPs to benefit investors.

Overall, FAIR Canada is calling for improved oversight and clearer rules to support DIY investors and ensure they are better protected. We also urge CIRO to look more broadly at OEO platforms to deepen their understanding of the full online investor experience.

You can review our response to CIRO’s consultation for more information.

FAIR Canada is Growing

Pira Kumarasamy joined FAIR Canada in April 2025, bringing a wealth of experience in communications, media relations, and strategic social media planning. With a strong background in agency work and consulting, she has led impactful communications projects across various industries. Before joining FAIR Canada, Pira served as Senior Manager, Communications and Public Affairs at The Investment Funds Institute of Canada (now called Securities and Investment Management Association). She has also worked as a freelance writer and consultant, contributing to publications focused on fintech and personal finance.

Bank Launches Videogame – A Fun, Free Financial Game for Kids!

TD Bank has introduced Treat Island Tycoon, a free financial education game on Roblox for kids aged 10 to 14. In this interactive game, players take charge of a frozen treat stand, earning in-game currency while making key financial decisions—like saving, spending, and even borrowing—to grow their business.

Why is this important? A recent TD survey revealed that 86% of Canadian parents believe interactive games help make financial literacy more engaging for kids. With Treat Island Tycoon, TD is making learning about money exciting, secure, and accessible—assisting young players to build smart financial habits for the future. Learn more in Investment Executive’s article here.

To help your kids start their financial adventure, check out the game on Roblox!

Throughout the year, FAIR Canada (Canadian Foundation for the Advancement of Investor Rights) submits many comment letters on various important policy and regulatory matters that have an impact on investors. Read more about our investor advocacy work.

We’d Love to Hear From You!

Do you have feedback on our newsletter or suggestions for topics you’d like us to write about? Your input is valuable and will help us improve our newsletter content for loyal subscribers like you. Please email us at info@faircanada.ca with your comments and/or suggestions.

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To learn more about our advocacy for investors, visit FAIRCanada.ca