Retail Investors Ask Advisors About Crypto, Inflation – But Not Payment For Order Flow

Retail investors have never had it better. They can trade for free, buy investment funds with almost no fees and have access to incredible trading and investing technology.

Unprecedented access to financial markets, however, comes with new complexity. Choosing the right ETF, understanding the risks of trading options and managing the tax implications of your investments isn’t easy. Put another way, just because I have the tools needed to repair my own car doesn’t mean its a good idea.

This is in large part why over two-thirds of the over 600 financial advisors participating in a new Coalition Greenwich study expect that the DIY investing trend, which accelerated during the COVID-19 lockdown of 2020, will either have no impact or, conversely, generate more demand for financial advice over time. 

So what are retail investors coming to their advisors for? Given that the study was conducted in January 2022, it is not surprising that discussions with clients focused most frequently on inflation and U.S. tax policies. Running close behind, nearly two-thirds of FAs discussed digital assets with their clients, while nearly half discussed ESG investments and a third private company investments.

Interestingly, retail investors are not as concerned about SEC regulations and payment for order flow (PFOF), the practice that allows commission-free trading, which is a very different narrative from the one in institutional markets. Considerable debate continues in Washington and on Wall Street regarding the benefits that PFOF may or may not bring to retail investors. But as we’ve said in numerous other reports, PFOF brings with it commission-free trading and, from the retail investor’s perspective, they’ve never had it better.

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