During yesterday’s event in London we discussed the Future of Personal Investing along with five FinTech experts: Richard Flax (Moneyfarm), Carl Hazeley (Finimize), Iris ten Teije (Koia), Michelle McGrade (former CIO Virgin Money) and Martin Sokk (Lightyear). Starting off with a quick summary of what we do from our Product Manager Ben, we quickly fielded some interesting questions from the audience regarding our plans on expanding into ranking cryptocurrencies in the near future - and if that comes as news to you, consider this as an unofficial announcement of good things to come!

Following that, our COO Yuchen took the floor and started the panel. One of the first things discussed was where the market is now (with inflation at multi-decade highs and commodity supplies under pressure due to the turmoil in Ukraine), how the big firms are reacting and what retail investors should do in response.

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“There’s a lot of inertia in the industry currently,” said Richard. “In recent years we’ve seen the ‘retail-isation’ of investing. Big companies are opening up to the everyday investor, with costs starting to come down. There’s more transparency, and more focus on finding the right way to provide useful educational content.”

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It’s undeniable that since the pandemic, it has become a lot easier for the average person to lump their money into an investment hoping for it to become the next Tesla, but there is still a wide gap in knowledge between institutional and retail investors. “Communication to retail investors is now more important than ever,” Michelle suggested, “but it remains difficult due to regulations.”

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Martin added that fees were another stumbling block for retail investors. “There’s an insane cost to invest - transaction fees, FX fees etc.” - one of the main reasons he co-founded Lightyear. He also debated Richard’s claim, saying that transparency wasn’t really the focus of the big firms: “There’s so much hidden stuff, it’s like opening a Pandora’s box.”

However, Michelle countered that hidden fees might not be the most relevant problem: “If people stay invested, selling at the wrong time is a lot worse than dealing with transaction fees”. Both problems are well worth solving in their own right, but just how do we teach beginners effectively about a practice that can be the whole career of a Wall Street analyst?

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“We need to talk to people like they’re normal, and meet them at their level,” Carl argued. “We hear about the catastrophic stories, but the reality is that most people do invest 80/20. You do your ETFs as your 80% and leave it, and use your 20% to have fun and pick your own stocks”. And while stock picking might be seen as more risky than the set-and-forget mindset, crypto is a whole new level.

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In Iris’ opinion, “there are so many new asset classes nowadays, you really can invest in anything.” Koia allows for fractional investing into alternative asset classes such as rare whiskies, watches, and even trading cards. With cryptocurrencies like Bitcoin having returns in the thousands, many retail investors understandably want to get involved and ride the wave up.

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Richard commented that we “need a basic health check on our investments,” which perfectly sums up what DIY investors are struggling with. With so many new opportunities of investment available to retail investors today, the challenge is partially access (hidden fees) and partially education. It’s one thing to have all the doors opened for you, but it’s a whole new level to choose which door you want to go through.

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The panel concluded with each guest speaking about the investment opportunities they were focusing on for 2022 and beyond. Carl’s immediate answer was scarcity: “I think that theme will be important in upcoming years. Energy, water, copper - when was the last time we built a new copper mine?” The COVID-19 pandemic and the Russia-Ukraine war highlighted how quickly global supply chains can be disrupted (oil being a perfect example). So while other commodities seem to be in healthy supply currently, all it takes is one domino to go down for the whole line to fall.

Michelle gave us two areas to look out for: sustainability and disruption. “Making the world a better place will always be important. And we’ve all seen what Elon Musk can do - but he’s not the only one.” While replicating Tesla’s meteoric rise is unlikely, looking out for the next big thing is never a bad idea.

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In summary, our panel agreed that while retail investors are getting more and more access to what seemed to be Wall Street-only-privileges, there’s still a lot more to be done. “An awful lot hasn’t happened [today] that we may have expected to happen 5 years ago,” said Richard. And while it remains to be seen what is achieved in the next 5 years, sustainability, disruption, and scarcity seem to be the top themes of the near future.

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Many thanks to our guest speakers Richard, Carl, Iris, Michelle and Martin and of course to our attendees for joining. We hope to see you at our next event, stay tuned!

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