A year ago, GameStop symbolised the ‘democratisation’ of investing. However, a recently published book suggests it was ‘The Revolution that Wasn’t’, with no power shift towards ordinary investors.
In the UK, elevated share trading coincided with the arrival of a new cohort of first-time investors. However, headline-catching stories around very young investors experimenting with meme stocks and cryptocurrencies were a smokescreen for more profound underlying changes.
According to UK D2C: Market Overview published today, direct platform assets increased 30% in 2021 with customer numbers up by another three hundred thousand. Surprisingly, the average age of self-directed investors increased confirming that renewed interest in personal investing is broadly based.
While the pandemic has caused some short-lived behavioural shifts, it has amplified the effects of a number of megatrends that are driving the D2C market:
- Digitalisation – including the availability of information and tools to enable individuals to do things that used to be the preserve of companies and experts.
- Increasing awareness of the importance of personal financial resilience and shifting responsibility from the state to the individual.
Digital investing services are on the front line of these shifts. But investing can be confusing to first-timers, who are unlikely to achieve adequate outcomes without help. Providers are developing services to better guide investors into appropriate portfolios. The regulator wants to add ‘friction’ to more speculative investment behaviour, and seems keen to introduce sensible default options for a wide range of investing goals, in particular retirement.
Abrdn’s CEO described acquiring Interactive Investor as a ‘no brainer’ as the asset manager reimagines its purpose in the personal wealth market. For D2C brands, game on is more apt than GameStop.