Besides the lower fees that come with passive investment strategies, investors have been drawn to these options by the diversification advantages of buying indices rather than individual stocks and bonds. In recent years however, the run-up of technology stocks with exposure to the AI trade have produced a concentration risk that too few investors appreciate.
At the end of June, the 10 largest stocks on the S&P 500 represented close to 40% of the index’s weight. On the Nasdaq-100, the 10 largest represented about half of the index.
Nvidia alone represents about 7.5% of BlackRock’s iShares Core S&P 500 Index ETF, which tracks the S&P 500. It is about 12% of the TD Global Technology Leaders Index ETF, a fund of roughly 240 holdings. And it is about 17% of the Global X Artificial Intelligence Semiconductor Index ETF, a semiconductor fund of roughly 25 names. The same company, three times over.
That is not a spread of risk. It is one bet placed in triplicate, and it was bought with the assumption of diversification.
Discount brokers earned their place. They cut commissions to nothing, opened the market to anyone with a phone and made it possible to build a portfolio without asking anyone’s permission. Nobody is proposing to take that back.
But these firms should do more to ensure clients understand concentration risk at a time when — in the U.S. at least — investors are facing a level of concentration not seen since the mid-1960s.
No discount broker in Canada shows their client the kind of overlap that exists between the three ETFs referenced above.
Wealthsimple has at least put that refusal in writing, for clients of its managed service rather than its self-directed one. The wording is admirably plain. Investors are responsible for monitoring their exposure to any individual company across all their positions, including “look-through exposure via ETFs or other pooled investments.” Then: “We do not calculate your concentration in a single security, sector, market or geography.”
The firm holds every position in the investor’s account. But it won’t do the sum. It has told investors to do it themselves.
Its competitors have said nothing. Their platforms show nothing. On the evidence, they are telling investors the same thing without the courtesy of saying so.
And it is real work. Look inside each fund. Add one company’s weight across all of them. Do it again after the next trade.
Investors have no tools for that. The discount brokerage has all of them. The positions sit on its own books and the sum would finish before the page reloads.
Investors can buy this information — overlap checkers, look-through reports, concentration alerts — from an outside vendor, for a calculation their own broker could run for nothing.
Discount brokerages calculate plenty. They value an account in real time, track buying power to the dollar and, because regulators require it, they work out and report an investor’s rate of return every year. The arithmetic has never been the obstacle. They run the sums they have been told to run.
Brokers call this self-directed investing. Investors make the decisions. The broker keeps the number that would tell them whether they were sound ones.
CIRO’s guidance
The silence once had a justification. A rule limited a discount broker’s ability to offer advice, and for years almost any prompt that might sway a decision counted as advice by another name. Silence was the safe course. The caution was earned.
That justification is gone. In March 2026 the Canadian Investment Regulatory Organization (CIRO) issued new guidance for discount brokers. A broker now offends only if it endorses a specific trade. Showing a client a fact is not an endorsement.
CIRO did more than permit it. The guidance points approvingly to real-time disclosure — information delivered on the order screen, while the client is still deciding whether to press the button.
The investor’s Nvidia exposure is a fact about their account. Nothing in the new rule stands in the way of reporting it.
This is not an abstract worry. On May 28, 2026, the Bank of Canada warned that information technology “now accounts for nearly the same share of the S&P 500’s total market value as it did at the peak of the dot-com bubble,” and that a decline in the sector’s earnings “could have a significant impact on the broader market.”
Investors holding Nvidia three times over are the ones likely to learn a hard lesson.
What would spare them is not a risk score or a warning label. It is one line of fact on the order screen: your five largest company exposures on the platform, funds included, as they would stand once the order fills. No judgment. No threshold. No advice. Just the list, and whether anyone puts it in front of the investor before they press the button.
The industry cannot say it has not noticed. Questrade’s own investor-education article, updated March 23, 2026, runs a section headed “Overlap: A Hidden Factor.” It tells readers that “adding many ETFs does not automatically create a more diversified portfolio.”
Questrade could run that calculation on the order screen. So could every one of its competitors. None of them does.
The permission exists. The data exists. The arithmetic costs nothing. What is missing is the will to give customers the one number that would make “self-directed” mean informed.
Put the number on the order screen before the order fills. Every day it stays off is a day the industry has decided it’s better if investors don’t know.
