He’s the president of the SEC Gary Gensler to issue alerts to retail investors who use commission-free brokerage applications to buy and sell stocks. “I would like to say to all of you while you are investing: beware that (such apps) are trying to make you trade more often and the statistics usually show that investing is good, but trading often is not,” added the number. one of the US Consob.
According to Gensler, in essence, the brokerage app they want users to trade frequently, which could be bad for investing. Gensler’s comments came after the frenzied question about stock memes fueled by forums like Reddit, which began in January 2021 and the spotlight he put on the so-called investment gamification by trading apps such as Robinhood.
Gensler said that while it’s no secret that Americans are “bombarded every day with … behavioral suggestions” while using technology, the implications become troubling when it extends to finance.
“Brokerage applications, robo advisors, are doing it as well, and I think we need to be aware that their motivation is to make more revenue for that startup or more money for that application and that business,” Gensler said. “We have a basic idea in America that they should give us advice and recommendations for our benefit.”
The SEC looked at gamification and behavioral tips to see what steps, if any, the regulator can take to provide greater investor protection, Gensler noted. At the same time, Gensler acknowledged that there has recently been an increase in the number of people who are interested in investing.
Gensler also added his confidence that trading platforms will move forward in the coming months to have more rules. Additional control is critical for crypto investors to gain protection when trading stocks or other asst, according to Gensler. The SEC number one rocked the cryptocurrency industry last year, even when he argued that most of the tokens were similar to stocks that should be covered by the SEC’s tough rules.