Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

The kids are alright: finance's old guard sees generational change

EconomyOct 11, 2021 06:05AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: Robinhood Markets, Inc. CEO and co-founder Vlad Tenev and co-founder Baiju Bhatt pose with Robinhood signage on Wall Street after the company's IPO in New York City, U.S., July 29, 2021. REUTERS/Andrew Kelly/File Photo

By John McCrank

(Reuters) -When Wall Street veterans gathered this week for one of their first in-person conferences since the pandemic began, the focus, on emerging issues from "meme stocks," to cryptocurrencies and free trading apps, signaled a new era for the world of finance.

More than 460 finance executives, regulators and politicians met in Washington, with another 800 tuning in virtually, for the Security Traders Association (STA) annual conference, an event better known for rehashing dry decades-old issues from trading fees and market data to advances in algorithmic trading.

But this year's gathering, which wrapped up on Friday, follows an extraordinary few months in which millions of young retail traders convening in online forums and trading through low-cost mobile apps have frequently piled into "meme stocks" - most notably video retailer GameStop (NYSE:GME) in January.

The volatility of that episode was a common theme and for many participants the issues struck close to home: speaking in fireside chats and panels, several said their kids had been drawn into the market after retail brokers like Charles Schwab (NYSE:SCHW) Corp and Fidelity followed Robinhood (NASDAQ:HOOD) Markets' and dropped commissions.

Robinhood said at the end of last quarter it had 21.3 million active users, with an average age of 31, and that half of those were first-time investors. The company is also trying to recruit new users on college campuses, offering $15 to start investing and the chance to win $20,000 towards tuition.

"I'm thrilled that my kids are even talking about trying to invest and save and look towards the future," Republican lawmaker Bill Huizenga, who has five kids, aged 15 to 24.

"I would think we should be encouraging that," he added.

Eric Pollackov, global head of ETF capital markets at Invesco, marveled that his son, a college sophomore, used a mobile app to buy an exchange-traded fund created by his firm that tracks U.S. long-term, investment-grade corporate bonds.

"What I love to watch in this industry ... is the adoption rate by all types of investors," he said.

But while many participants cheered the emergence of a young new investing class, others sounded a note of caution. After what happened in the GameStop case, the Securities and Exchange Commission (SEC) launched a consultation on game-like behavioral prompts some brokers use to drive transactions, amid worries young investors are being manipulated into risky trades.

Allison Lee, a Democratic SEC commissioner, said her five children, all in their 20s and 30s, also use trading apps.

Talking to them about market risks tends to "bore them to death," she said, but she wants to ensure brokers give full disclosure around potential conflicts of interest and how they make their revenue, so everyone understands how they work.

Cryptocurrencies are also drawing in young investors, including the children of ex-Commodity Futures Trading Commission Chair Christopher Giancarlo, known among crypto-evangelists as #CryptoDad for his support of the new industry.

He recalled how a discussion during a family ski trip with twenty-somethings who had never shown interest in the markets before opened his eyes to "a true generation gap."

"They intuitively get digital money, they intuitively get tokenization, and they intuitively get bitcoin and crypto," he said.

The head of the SEC has warned of widespread fraud in cryptocurrencies.

STA head Jim Toes said protections were needed for this new generation of investors, noting that his 23-year-old was also engaging in the market for the first time.

"It also kind of renews this sense of responsibility that we all have of being guardians of the marketplace," he said, "and making sure we leave something better for the next generation."

The kids are alright: finance's old guard sees generational change

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email