Today, a number of companies offer consumers the opportunity to save and invest online via a robotic advisor. Sometimes, the consumer is offered the option of rounding up every purchase to the nearest dollar, then depositing the money saved in an account for eventual investment. Or they can deposit their assets in relatively risky investments, such as exchange-traded funds.
The home pages of the three FinTech companies studied - Mylo, Wealthsimple and BMO Smart Portfolio - are packed with promotional phrases. But the information is relatively vague. Consumers who simply browse these pages before taking the plunge may not know what they're getting into. And yet, they are invited to act quickly. At Mylo, we suggest investing in 10 minutes, and at Wealthsimple, in 5 minutes!
To find out more, consumers need to read various legal documents. These documents contain relevant information, including protective measures to be taken, as well as a large number of disclaimers. What's more, although most companies have clearly made an effort to ensure that their documents are clear, their practices can sometimes be confusing.
According to our survey of 800 Canadian consumers in four provinces - Quebec, Ontario, Alberta and British Columbia - those currently using these platforms, or who have used them in the past three years, are predominantly men aged 35 to 54. But the next generation - the millennials - are not far behind. According to our survey, this generation is attracted by the speed and flexibility offered by these platforms.
Those aged 25 to 35, meanwhile, say they feel in control when dealing with a FinTech company, and have little concern about the protection of their personal information. However, when questioned, they reveal that they are relatively uninformed. It is therefore particularly important that they are well protected. But are they? To find out, we studied Canadian federal legislation and the laws in force in four provinces: Quebec, Ontario, Alberta and British Columbia.
This has shown us that there is room for improvement. Fortunately, having identified best practices in Australia, the United States, France, the United Kingdom, Singapore, Switzerland and the European Union, we can say that there are many interesting avenues that could be used to increase consumer protection for FinTech savings and investment products.
