May 26, 2026
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Something significant is happening in Canada’s investment landscape, and the Ontario Securities Commission’s Investor Advisory Panel (IAP) has called attention to it in its 2025 Annual Report. Canadian retail investors are operating in an increasingly complex environment with more risks, and the regulatory framework designed to protect them is struggling to keep up.
The IAP, which advises the OSC on investor protection policy, identified eight major forces reshaping how Canadians invest — from AI-generated fraud to the explosive growth of complex exchange-traded funds (ETFs) to bank-employed advisors who, by their own admission, may not be recommending the best products for their clients.
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This isn’t alarmism. This is the official watchdog speaking.
Is your social feed giving you financial advice — or just selling you risk?
According to the IAP’s 2025 report, “more investors are making investment decisions based on information found on social media.” The Canadian Investment Regulatory Organization (CIRO)’s DIY Investing Report confirms that platforms like YouTube, Reddit and Instagram have become primary financial education channels — particularly for Canadians aged 18 to 34.
The problem is that the vast majority of finfluencers, or influencers creating personal finance content, are not registered with any securities regulator. They are not required to assess whether their recommendations suit your financial situation. They carry no liability if you lose money acting on their advice. The CSA and CIRO issued guidance in 2025 on how existing securities laws apply to finfluencer activity — but the IAP has already called for the regulator to consider additional measures.
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AI deepfakes are now a financial weapon — and they’re getting better
The 2025 IAP report raises a direct warning: bad actors are deploying artificial intelligence (AI) to run investment scams at scale. The Osgoode Investor Protection Clinic documented fraud cases involving AI-generated deepfake videos — fake footage of credible figures endorsing fraudulent investment platforms.
Securities fraud in Canada is becoming more frequent and more sophisticated, while the country’s framework for tackling this crime remains, in the IAP’s words, “fragmented and disjointed.” The Panel has called on the OSC to accelerate freeze powers, increase enforcement capacity and expand inter-agency partnerships.
There is notable progress: Canadian securities regulators launched a new disruption initiative in 2025 that successfully deactivated fraudulent websites, including fake investment platforms and cryptocurrency sites.
Your trading app is designed to make you trade more — not invest better
The IAP’s 2025 report dedicates significant attention to digital engagement practices (DEPs) — the design features embedded in trading platforms that push users toward more frequent, often riskier decision-making including push notifications, “Top Trending” stock lists, reward programs and gamified streaks.
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An OSC examination of DEPs found that these features can materially influence investor decision-making — not toward better outcomes, but toward greater engagement and, frequently, greater risk-taking. The IAP has called on regulators to reduce or restrict the most harmful DEPs not only in self-directed channels but across retail investing broadly. (1)
Read more: Here are the 3 net worth milestones that change everything for Canadians (and what they say about you)
Not all ETFs are created equal — and the newest ones carry serious risk
Last year marked a milestone in Canadian investing: For the first time, the number of new ETF launches outpaced mutual fund launches, with 212 of 374 new products launched as ETFs (excluding single-stock ETFs, of which 50 launched in 2025).
That shift is broadly positive — ETFs tend to carry lower fees and offer broad diversification. But the IAP flags a significant catch: many of the new products are a notable departure from the traditional passively managed, diversified basket of investments. Single-stock ETFs concentrate risk in one company, sometimes with leverage. Digital-asset ETFs “are anticipated to exhibit much higher volatility than a more traditional ETF,” the OSC report states.
Your bank advisor may be offering you a deliberately narrow menu
In 2025, the OSC and CIRO jointly reviewed sales practices at bank-affiliated mutual fund dealers — and the results were troubling. The survey found that product recommendations have sometimes not been in clients’ best interests, and that clients have been given incorrect information.
The report found that 94% of bank branch respondents could only offer proprietary funds — their employer’s own products. Almost half agreed that clients would benefit from access to a broader range of mutual funds. The IAP has called on regulators to revisit what constitutes a “reasonable range of alternatives.”
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Good news: Your right to compensation is getting stronger
Not all of the IAP’s findings are cautionary. The Ombudsman for Banking Services and Investments (OBSI) — Canada’s primary dispute resolution body for investor complaints — is moving toward binding decision-making authority.
Currently, OBSI can recommend compensation, but firms can decline to comply. Binding authority would change this and force firms to legally pay when OBSI finds a complaint valid. The IAP — which has been pushing for this reform for years — called the progress “long overdue.” It also recommended that OBSI’s compensation limit, unchanged since the organization was established in 1996, be adjusted for inflation going forward.
What to do now, as an investor
- Verify any advisor or finfluencer at CIRO’s Advisor Report portal (ciro.ca) before acting on financial advice
- Use the OSC’s Check Before You Invest tool (checkfirst.ca) to confirm any investment platform is registered
- Disable push notifications on trading apps and ignore “trending” asset lists — these features are designed for engagement, not your returns
- Read the Fund Facts document before purchasing any ETF — a product name that includes “ETF” no longer guarantees diversification
- Ask your bank advisor directly what products outside their firm’s lineup they considered for you
- If you’ve suffered financial loss from advisor misconduct, file a complaint with OBSI now (ombudsman-bsi.ca) — documenting your case early positions you well when binding authority takes effect
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Romana King, Senior Editor at Money.ca, also writes for various North American publications and the RKHomeowner blog. Her book, House Poor No More, is an Amazon bestseller and five-time award winner, including the 2022 New York CPA Society's Excellence in Financial Journalism (EFJ) Book Award.
