Retail Investors Won on Fees But Are Losing on Risk
Gamified trading apps and niche ETFs have a cost that’s harder to spot but is little different from the damage inflicted on portfolios by high fees.
Pricing risk.
. Photographer: Michael Nagle/Bloomberg
Retail investors have won the battle of fees. Brokerage accounts are free. Trading commissions are history. Anyone can own the entire stock market through a single exchange-traded fund for basically nothing. It’s a huge win for investors and terrible for the investment industry.
But the industry is fighting back with a growing and lucrative lineup of gamified trading apps and niche ETFs that entice investors to gamble with their savings. The toll on portfolios is harder to spot or measure, but it’s every bit as costly as the high fees investors once paid.