A recent regulatory decision in Canada is poised to allow investing platforms to introduce prediction markets — venues where everyday investors could place bets on outcomes like whether the Bank of Canada will lower interest rates next quarter or whether 2026 will become the warmest year on record.
This marks a notable shift away from the fundamentals that traditionally build long-term wealth: studying business performance, assessing leadership and strategy, and focusing on cash flow and dividends. Prediction markets encourage a different behaviour — wagering on events rather than investing in productive enterprises — and that shift carries important implications for individual savers and for the industry as a whole.
The change is part of a broader trend in some corners of the financial industry to blend investing with features borrowed from entertainment and social media. As someone who believes self-directed investors deserve platforms designed to protect their financial interests first, it’s important to have a frank discussion about where this development could lead.
What’s at stake
Self-directed investing has matured. These platforms are no longer peripheral “experiment” accounts; they now manage meaningful portions of people’s financial lives. Accounts in Canada grew rapidly, rising from around 2.3 million in 2020 to more than 11 million by 2023, and assets held on self-directed platforms have surpassed the trillion-dollar mark. Today, a large share of Canadian investors use these platforms to execute saving and retirement strategies.
That success is important because it amplifies the consequences of how these platforms are designed. The concern isn’t the mere existence of prediction markets, but the risks when those markets form part of ordinary investing accounts. All-or-nothing bets do not create new wealth; they transfer funds between participants. In such markets a majority of participants will typically lose while a smaller minority wins, and platform economics often ensure the operator takes a portion through fees or spreads.
Beyond the immediate financial transfers, the design of interfaces matters. Many of the psychological techniques that power social media engagement — short feedback loops, vivid rewards, and persistent notifications — are now being applied to investing apps. This raises the question: should tools meant to help people grow wealth be built using the same mechanics designed to capture human attention?
Gamification can boost usage and make financial apps feel more accessible, but the same mechanics can also encourage excessive trading. Features like leaderboards, achievement badges, animated congratulatory screens, and push notifications create urgency and the desire for frequent action. For many investors, that’s counterproductive: overtrading often increases costs through poor timing, higher transaction and conversion fees, and unintended tax consequences, all of which can erode returns over time.
The real risk
The dangers go deeper than UX design. Younger investors today are facing significant pressures: housing affordability that places home ownership out of reach for many, a retirement landscape that feels distant or uncertain, and rapid technological change that raises concerns about job stability. In that environment, promises of quick gains or excitement from speculative products can appear especially attractive.
That appeal, however, runs directly counter to the proven path to lasting financial security: start early, contribute consistently, and avoid reacting to short-term market noise. Time in the market and disciplined saving remain the most reliable drivers of wealth accumulation.
When fintech innovators lowered costs and improved access to investing, they brought real benefits to many savers. But the convergence of accessible platforms, speculative products, and attention-driven design amplifies risk for those who are less experienced. A couple of sharp market corrections could leave inexperienced investors substantially disadvantaged, undoing gains in financial inclusion.
Red flags to watch for
Not every platform is the same, and not every new feature is harmful. Still, investors should be alert. Ask yourself whether a feature is genuinely intended to help you invest, or whether it is primarily nudging you to trade more. If your investing app starts to feel like a slot machine — with quick wins, bright animations, and constant prompts — consider whether the app is encouraging behaviour that conflicts with long-term goals.
Also understand how platforms earn money. Commission-free trading can be a real consumer benefit, but it does not mean the platform has no revenue model. Building and operating brokerage services is expensive, and platforms often monetize through alternative means. Speculative products such as derivatives and certain digital assets can be more scalable and more profitable for firms, which may influence how products are promoted. Knowing how a platform makes money helps you judge whether its recommendations align with your interests.
A higher standard
Identifying red flags is only the start. To protect retail investors, industry participants need to embrace a higher standard: design and promote products that prioritize long-term financial health over short-term engagement metrics. This requires leadership from both established financial institutions and disruptive fintech firms.
For incumbent firms, the challenge is to keep innovating in ways that genuinely benefit clients. The same technologies that can nudge users toward overtrading can be repurposed to encourage reflective behaviour: prompts that encourage pause before making speculative trades, tools that reward consistent saving, and interfaces that surface long-term performance rather than short-term volatility.
For disruptors, the test is whether they remain true to a mission of widening access to investing rather than shifting toward business models that profit from client losses or speculative activity. Real wealth comes from patient discipline and steady contributions — design incentives should reflect that reality.
Millions of Canadians now entrust DIY investing platforms with their financial futures. It’s crucial to ensure the next generation of investors learns that disciplined, long-term investing — not speculation and dopamine-driven engagement — is most likely to deliver reliable results. The choices made by platforms, regulators and industry leaders today will shape what investing means for years to come.
Dimitri Busevs is president and chief executive officer of RBC Direct Investing. The views expressed in this article are those of the author and do not necessarily reflect those of MoneySense or its editorial team.