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The pandemic has fueled the launch of so many new investing platforms....
We saw an unprecedented flood of new platforms being launched to serve particularly the active investing market.
- Dan Raju, CEO, Tradier
This writeup is not meant to be a detailed study but a quick wrap of what we are seeing.
I am sure you have heard enough about how the pandemic has been a source of unprecedented growth for major brokerages including Tradier. Our traders who access Tradier from hundreds of applications, platforms, and content platforms have been engaged in the market at a scale I have never seen before.
I wanted to shed light on another trend we see. With over 200 plus connected platforms, the Tradier API’s has become the defacto fabric in the market to launch Investing platforms. Tradier today powers Equity apps, Derivative Platforms, Educators, Content Platforms, Algo Platforms, Screeners, Robo-Advisors, Brokers and so many other new innovative offerings that are hard to even categorize. This scale affords Tradier the luxury to centrally see what innovation is being launched and most importantly how investors behave and invest.
It started in April 2020. We saw an unprecedented flood of new platforms being launched to serve particularly the active investing market. The inbound requests to connect and launch on the API has been so high that our Bizz Dev teams had to go on overdrive to keep up with the demand. I recently spent time with these new clients on the ...why now?. and learned a few things I wanted to share.
- The pandemic has created a new brand of “Stay Home and Connected” Investors that trade differently. The traditional cycles of investor engagement do not apply to them. They are engaged with their money 24/7. This demand has triggered the launch of educational, alerting, and signal based platforms.
- "Content is King" again. The best content providers are winning and are feeding into the demand from online investors for new content.
- Third-Party Platforms: We believe that 75% of all traders do not rely on what their brokerage firms offer for all their trading needs and use third-party platforms and sites for their content. Brokerage firms are fast becoming execution destinations for online traders.
- Communities: There has been a massive increase in social Investing groups, Clubs, Chats, Slack groups, Discord groups, and whatsapp groups that are serving active traders by bringing real-time community engagement.
- Custom Digital Advice: A lot of mid-size Investment Advisors(RIAs) are launching their own private label custom Robo-advisory platforms at a rapid scale. We are seeing a massive increase in digital advisors that are employing derivatives as an investment vehicle.
- Brokerage firms should stop flaunting Brokerage Accounts: 75% of traders use multiple platforms and have multiple brokerage accounts. The account metric is fast becoming irrelevant. Most investors just do not close their account to move to another other. Many of them spend less time on the brokerage firms' apps than their preferred content sites. Everybody that I know has so many accounts, They just start trading elsewhere where they get an edge. I expect to see a fundamental shift in the way the industry looks at brokerage accounts. The focus will shift to account quality and activity.