The Rise of the Retail Investor Revolution

How Retail Investors have changed the landscape of financial markets forever

12 Jun 2024

Over the last 10 years, the number of everyday retail investors has surged, enabled by the rising influence of social media and trading platforms. This has transformed the landscape of financial markets and .

1. What is a Retail Investor?

A retail investor is an individual who buys and sells securities, such as stocks, bonds and mutual funds, in a non-professional capacity. Unlike institutional investors, who manage large sums of money for clients or firms, retail investors typically invest smaller amounts and use online trading platforms to manage their portfolios.

2. The Retail Investor Boom

Trading platforms have been the core enabler of democratising access to financial markets. By providing reduced fees, fractional share ownership and commission free trading, trading platforms have made it possible for almost anyone to participate in global financial markets.

The number of trading platform users has been exploding in recent years:

Graph showing Business of apps data in our format

UK Specific numbers bit

There are at least a 8 million trading platform users in the UK alone, with research from Finder indicating that in 2024 an estimated 27 million people in the UK have invested in some form, with 12.5 million owning stocks and shares in listed companies.

https://www.finder.com/uk/share-trading/investment-statistics

3. What This Means for the Future of Financial Markets

The rise of retail investors has significant implications for financial markets:

  • Increased Market Participation: More retail investors mean higher trading volumes and liquidity in the markets. This can lead to more dynamic price movements and increased market efficiency.

  • Regulatory Changes: The surge in retail participation has prompted regulators to ensure that markets remain fair and transparent. Often retail investors do not have access to the same market information as institutional investors, leaving their portfolios more exposed. The Financial Conduct Authority (FCA) in the UK has been active in monitoring market activities and protecting retail investors from potential risks.

  • Focus on ESG: Retail investors are increasingly interested in Environmental, Social, and Governance (ESG) issues. This shift in focus can often be vital pressure on companies to adopt more sustainable and ethical practices, aligned with societal values.

  • A push for Shareholder Democracy: With retail investors holding more of the market than ever before, organisations like Root, ShareSoc, UKSA, The Engagement Appeal and many more are pushing to create networks and solutions to ensure no matter your investment size, your voice is heard.

4. The Power of Retail Investors: GameStop and Tesla

The the most notable cases illuminating the influence of retail investors in recent years have been the events that unfolded at GameStop and Tesla.

GameStop Saga: In early 2021, retail investors from the Reddit community "r/wallstreetbets" banded together to buy shares of GameStop, a struggling video game retailer. Their collective buying pushed the stock price from around $20 to nearly $500 in a matter of weeks. This event highlighted the power of retail investors to influence market dynamics and challenge institutional investors. In fact it was so influential that a movie, “Dumb Money” was made made depicting these events.

And it isn’t even over yet, in 2024, Keith Gill, also known as "Roaring Kitty," reappeared on social media, reigniting interest in GameStop. This triggered another surge in retail buying activity, causing GameStop shares to jump 141% in just a couple of days.

Elon Musk’s Tesla Payout: The recent controversy surrounding Elon Musk's compensation package from Tesla. In 2024, Musk was set to receive a $56 billion pay package based on performance targets. However, significant opposition from shareholders led to a reevaluation of this payout. Though, recent support from retail investors, that make up over 40% of Teslas equity holding, has meant he might push it through after all - once again indicating the power of having the everyday investor on your side.

Conclusion

The rise of retail investors is reshaping the financial landscape in the UK and globally. With more people accessing the markets through online trading platforms, the influence of individual investors is growing. By staying informed, participating in the market responsibly, and leveraging the tools and resources available, retail investors can continue to play a vital role in the evolution of financial markets.

Disclaimer

This article is for informational purposes only and does not constitute legal, financial, or investment advice. The information provided may not be comprehensive or up-to-date. Readers should conduct their own research and consult with a qualified financial adviser or legal professional before making any investment decisions. The author and publisher are not liable for any actions taken based on the information provided in this article.

Over the last 10 years, the number of everyday retail investors has surged, enabled by the rising influence of social media and trading platforms. This has transformed the landscape of financial markets and .

1. What is a Retail Investor?

A retail investor is an individual who buys and sells securities, such as stocks, bonds and mutual funds, in a non-professional capacity. Unlike institutional investors, who manage large sums of money for clients or firms, retail investors typically invest smaller amounts and use online trading platforms to manage their portfolios.

2. The Retail Investor Boom

Trading platforms have been the core enabler of democratising access to financial markets. By providing reduced fees, fractional share ownership and commission free trading, trading platforms have made it possible for almost anyone to participate in global financial markets.

The number of trading platform users has been exploding in recent years:

Graph showing Business of apps data in our format

UK Specific numbers bit

There are at least a 8 million trading platform users in the UK alone, with research from Finder indicating that in 2024 an estimated 27 million people in the UK have invested in some form, with 12.5 million owning stocks and shares in listed companies.

https://www.finder.com/uk/share-trading/investment-statistics

3. What This Means for the Future of Financial Markets

The rise of retail investors has significant implications for financial markets:

  • Increased Market Participation: More retail investors mean higher trading volumes and liquidity in the markets. This can lead to more dynamic price movements and increased market efficiency.

  • Regulatory Changes: The surge in retail participation has prompted regulators to ensure that markets remain fair and transparent. Often retail investors do not have access to the same market information as institutional investors, leaving their portfolios more exposed. The Financial Conduct Authority (FCA) in the UK has been active in monitoring market activities and protecting retail investors from potential risks.

  • Focus on ESG: Retail investors are increasingly interested in Environmental, Social, and Governance (ESG) issues. This shift in focus can often be vital pressure on companies to adopt more sustainable and ethical practices, aligned with societal values.

  • A push for Shareholder Democracy: With retail investors holding more of the market than ever before, organisations like Root, ShareSoc, UKSA, The Engagement Appeal and many more are pushing to create networks and solutions to ensure no matter your investment size, your voice is heard.

4. The Power of Retail Investors: GameStop and Tesla

The the most notable cases illuminating the influence of retail investors in recent years have been the events that unfolded at GameStop and Tesla.

GameStop Saga: In early 2021, retail investors from the Reddit community "r/wallstreetbets" banded together to buy shares of GameStop, a struggling video game retailer. Their collective buying pushed the stock price from around $20 to nearly $500 in a matter of weeks. This event highlighted the power of retail investors to influence market dynamics and challenge institutional investors. In fact it was so influential that a movie, “Dumb Money” was made made depicting these events.

And it isn’t even over yet, in 2024, Keith Gill, also known as "Roaring Kitty," reappeared on social media, reigniting interest in GameStop. This triggered another surge in retail buying activity, causing GameStop shares to jump 141% in just a couple of days.

Elon Musk’s Tesla Payout: The recent controversy surrounding Elon Musk's compensation package from Tesla. In 2024, Musk was set to receive a $56 billion pay package based on performance targets. However, significant opposition from shareholders led to a reevaluation of this payout. Though, recent support from retail investors, that make up over 40% of Teslas equity holding, has meant he might push it through after all - once again indicating the power of having the everyday investor on your side.

Conclusion

The rise of retail investors is reshaping the financial landscape in the UK and globally. With more people accessing the markets through online trading platforms, the influence of individual investors is growing. By staying informed, participating in the market responsibly, and leveraging the tools and resources available, retail investors can continue to play a vital role in the evolution of financial markets.

Disclaimer

This article is for informational purposes only and does not constitute legal, financial, or investment advice. The information provided may not be comprehensive or up-to-date. Readers should conduct their own research and consult with a qualified financial adviser or legal professional before making any investment decisions. The author and publisher are not liable for any actions taken based on the information provided in this article.

Over the last 10 years, the number of everyday retail investors has surged, enabled by the rising influence of social media and trading platforms. This has transformed the landscape of financial markets and .

1. What is a Retail Investor?

A retail investor is an individual who buys and sells securities, such as stocks, bonds and mutual funds, in a non-professional capacity. Unlike institutional investors, who manage large sums of money for clients or firms, retail investors typically invest smaller amounts and use online trading platforms to manage their portfolios.

2. The Retail Investor Boom

Trading platforms have been the core enabler of democratising access to financial markets. By providing reduced fees, fractional share ownership and commission free trading, trading platforms have made it possible for almost anyone to participate in global financial markets.

The number of trading platform users has been exploding in recent years:

Graph showing Business of apps data in our format

UK Specific numbers bit

There are at least a 8 million trading platform users in the UK alone, with research from Finder indicating that in 2024 an estimated 27 million people in the UK have invested in some form, with 12.5 million owning stocks and shares in listed companies.

https://www.finder.com/uk/share-trading/investment-statistics

3. What This Means for the Future of Financial Markets

The rise of retail investors has significant implications for financial markets:

  • Increased Market Participation: More retail investors mean higher trading volumes and liquidity in the markets. This can lead to more dynamic price movements and increased market efficiency.

  • Regulatory Changes: The surge in retail participation has prompted regulators to ensure that markets remain fair and transparent. Often retail investors do not have access to the same market information as institutional investors, leaving their portfolios more exposed. The Financial Conduct Authority (FCA) in the UK has been active in monitoring market activities and protecting retail investors from potential risks.

  • Focus on ESG: Retail investors are increasingly interested in Environmental, Social, and Governance (ESG) issues. This shift in focus can often be vital pressure on companies to adopt more sustainable and ethical practices, aligned with societal values.

  • A push for Shareholder Democracy: With retail investors holding more of the market than ever before, organisations like Root, ShareSoc, UKSA, The Engagement Appeal and many more are pushing to create networks and solutions to ensure no matter your investment size, your voice is heard.

4. The Power of Retail Investors: GameStop and Tesla

The the most notable cases illuminating the influence of retail investors in recent years have been the events that unfolded at GameStop and Tesla.

GameStop Saga: In early 2021, retail investors from the Reddit community "r/wallstreetbets" banded together to buy shares of GameStop, a struggling video game retailer. Their collective buying pushed the stock price from around $20 to nearly $500 in a matter of weeks. This event highlighted the power of retail investors to influence market dynamics and challenge institutional investors. In fact it was so influential that a movie, “Dumb Money” was made made depicting these events.

And it isn’t even over yet, in 2024, Keith Gill, also known as "Roaring Kitty," reappeared on social media, reigniting interest in GameStop. This triggered another surge in retail buying activity, causing GameStop shares to jump 141% in just a couple of days.

Elon Musk’s Tesla Payout: The recent controversy surrounding Elon Musk's compensation package from Tesla. In 2024, Musk was set to receive a $56 billion pay package based on performance targets. However, significant opposition from shareholders led to a reevaluation of this payout. Though, recent support from retail investors, that make up over 40% of Teslas equity holding, has meant he might push it through after all - once again indicating the power of having the everyday investor on your side.

Conclusion

The rise of retail investors is reshaping the financial landscape in the UK and globally. With more people accessing the markets through online trading platforms, the influence of individual investors is growing. By staying informed, participating in the market responsibly, and leveraging the tools and resources available, retail investors can continue to play a vital role in the evolution of financial markets.

Disclaimer

This article is for informational purposes only and does not constitute legal, financial, or investment advice. The information provided may not be comprehensive or up-to-date. Readers should conduct their own research and consult with a qualified financial adviser or legal professional before making any investment decisions. The author and publisher are not liable for any actions taken based on the information provided in this article.

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© 2024 – All Rights Reserved - Root

© 2024 – All Rights Reserved - Root

© 2024 – All Rights Reserved - Root