The kids are okay: The old financial guard is seeing a generational shift

Texas News Today

File photo: Robinhood Markets, Inc. Vlad Tenev and co-founder Baiju Bhatt pose with a Robinhood sign on Wall Street after an IPO on July 29, 2021 in New York City, USA. Reuters / Andrew Kelly / FILE PHOTO

8 October 2021

John McCrank

(Reuters) – This week, as Wall Street veterans gathered in one of the first face-to-face meetings since the pandemic began, it focused on new issues ranging from “meme stocks” to cryptocurrencies and free trading apps did. world of finance.

More than 460 financial executives, regulators and politicians met in Washington, and an additional 800 virtually attended the Security Traders Association (STA) annual meeting. From transaction fees and market data to progress, the event is well known for ironing out the dry problems of decades ago. in algorithmic trading.

But this year’s rally, which ended on Friday, was an extraordinary few months when millions of young retailers who congregate on online forums and trade via low-cost mobile apps often piled on “meme stocks”. Were. to be continued. January.

The instability of the episode was a common theme, and caused problems near home for many participants. In fireside chats and panels, some said that children were drawn into the market after retail brokers such as Charles Schwab Corporation and Fidelity followed the Robinhood market. I waived the fee.

Robin Hood said at the end of last quarter that there were 21.3 million active users with an average age of 31, half of whom were first-time investors. The company is also looking to recruit new users on college campuses, offering an opportunity to earn $15 for start-up investment and $20,000 for tuition.

“I’m excited to talk to our kids about investing, saving and looking to the future,” said Republican Representative Bill Huizenga, who has five children aged 15-24. Huizenga says.

“I think we should encourage it,” he said.

Eric Polakoff, global head of ETF Capital Markets at Invesco, used a mobile app to purchase a listed investment trust created by his company, whose college son tracks America’s long-term investable corporate bonds. I was particularly surprised.

“What I’m seeing in the industry is the hiring rate of all kinds of investors,” he said.

However, while many participants supported the emergence of young new investment classes, others drew attention. Following what happened in the GameStop case, the Securities and Exchange Commission (SEC) has launched a game used by some brokers to drive transactions to counter concerns that young investors may be exposed to risky transactions. being tampered with. We have started discussing the indications for action viz.

Democratic SEC Commissioner Alison Lee said five of her children (all in their 20s and 30s) are also using the trading app.

She said that talking to them about market risk “kills them”, but that brokers fully disclose potential conflicts of interest and how they generate their income. Everyone wants to make sure they understand how they work.

Cryptocurrencies are also attracting young investors, including the children of Christopher Giancarlo, the former chairman of the Commodity Futures Trading Commission, known among crypto campaigners for supporting new industries as #CryptoDad.

During his family’s ski trip, he remembered how talking with people in their twenties who had never been interested in the market turned into “true intergenerational differences”.

“They receive digital money intuitively, tokenize intuitively, and do bitcoin and crypto intuitively,” he said.

SEC officials warned of widespread cryptocurrency fraud.

Jim Toes, head of STA, said the new generation of investors needed protection and added that he was the first to enter the market at the age of 23.

“It also renews this sense of responsibility that we are all custodians of the market,” he said. “And make sure we leave something better for the next generation.”

(Reporting by John McCrank; Editing by Michelle Price and Sonya Hepinstall)

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