Robin Hood and other commercial apps can do more harm than good for young investors, says a ‘financier’ with millions of followers on social media.
- According to expert Tori Dunlap, retail trading apps can cause problems for young investors.
- She believes that apps do not educate their users enough and that they are not a minority group.
- Robin Hood was recently forced to pay 70 70 million after FINRA was accused by Fenra of harming consumers.
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Young investors, and especially generals, are pouring their surplus cash into things like cryptocurrencies and meme stocks, which have been pulled by social media communities that have teamed up to acquire Wall Street companies. Has worked, and has become popular with retailers like Robin Hood.
As positive as it is to see young people get involved in their finances, these apps are doing more harm than good, because they don’t educate their users enough and are particularly involved. There are no places, according to Finflancer and personal finance expert Tori Dunlap.
Dunlop, which has millions of followers on Instagram, TikTuk and Twitter and runs the personal finance education and advice brand ‘Here First $ 100K’, says the problem with these apps is that they appeal to new, younger investors. There are those who are often unaware of the risks, or what is a good investment strategy due to lack of education on the subject.
“They’re focusing on young people, which is great, but young people who don’t really know what they’re doing. They don’t really know how to invest, they don’t really know how to increase their wealth and So I think that’s a big risk, “he told an insider in an interview.” It’s great to go after this particular population, but what are you doing to educate them? Do you know what they are doing to understand the risks before they start investing? she said.
Dunlap knows a thing or two about caring for her finances. He started his first business at the age of 9 and by the time he was 25, he would have saved $ 100,000.
Considering the booming business on apps like Robin Hood or platforms like eToro, the Covid 19 epidemic has grown in popularity in retail over the past 18 months. But they are not without risks.
Just last month, Robin Hood agreed to pay US regulators about 70 70 million to settle a claim that it had misled millions of consumers, disqualified unscrupulous traders for risky tactics, and used such technology. Did not monitor which closed millions of people from trade. This was the largest fine on record by the Financial Industry Regulatory Authority.
At the same time, those who talk about finance, retail trading apps, and social media influencers have pushed for the idea of democratizing trade, which means that anyone can do it and their Does not need financial professionals to help you make money from investing.
Robin Hood declined to comment on the article. But a company spokesman pointed to its recent IPO filing, which said it was committed to helping customers “create sustainable, long-term financial success and offer a variety of educational tools.”
Dunlap said apps like Robin Hood have done a great job of making investing more attractive and attracting young people, which she believes will start to increase their wealth early in life, but She also admits that she has a long way to go.
Trading apps often “gamify” the activity, benefiting users with a small amount of digital confetti on the screen when they trade, or playing a little jingle to notify updates. For example, documentation was provided for users who have experienced the equivalent of an increase in gambling.
Another advantage is that the community created by the commercial apps is not particularly involved. Lack of educational tools is a problem, but Dunlap said she thinks these apps are designed in every way, which she calls ‘bro-bro’.
“If it doesn’t include minority groups, it’s not really democratization, if it doesn’t include women, people of color and other members of other minority groups,” Dunlop said. “Yeah, it’s like appealing to young people, but these straight white men aren’t hedge fund managers, they’re just straight white men ‘Finance Bruce’.”
This article was updated to include Robin Hood’s response. No other changes were made.
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