The Rise of the Retail Investor: The Technology Transforming Investor Relations
Historically, larger institutions have held the keys to the investment kingdom. Banks, hedge funds and other financial heavyweights have long used exclusive access and knowledge to peer under the hoods of public companies, using their findings to inform their investment decisions. Meanwhile individual investors have been left with little power in the stock market, deprived of the access and insight required to compete and find an edge.
Thankfully the tides are now turning, and the ‘democratisation’ of investment is underway. The GameStop short squeeze in January 2021, where Reddit users artificially inflated the stock price of a video game company on the brink of collapse, shook the foundations of the global financial system. It was a symbolic moment in investment history, as a new breed of digital shareholder asserted their power over the stock market.
As the name suggests, public companies are legally obliged to publish key information, including their annual accounts, quarterly reports and earnings calls. Investors, both big and small, can then interpret these figures and use them to assess the value of stocks. However, the way in which companies interact with investors has changed staggeringly little over the past 50 years.
For ordinary investors, connecting with companies and tracking down relevant information remains time-consuming, one-way, and still predominantly analogue. This leaves smaller players on the backfoot to larger financial institutions who can take advantage of their experience, datasets and address books to amass exclusive insights. The only way to level the investment playing field is to ensure that everything that’s disclosed is disclosed to everyone. And yet too often this is not what happens.
As a day trader myself, I became acutely aware of the difference between having public resources available and accessible . The fact that information is technically public does not mean that it’s easy to find, access or digest.
Take, for example, earnings calls. Public companies use these quarterly conference calls to announce and discuss their financial results, information that is critical for both existing and prospective investors. However, the means by which individuals can tune into these conversations is archaic. Typically, the calls are held as teleconferences or webcasts, requiring participants to dial in live using specific and expensive hardware to do so. Not only is this rigidity an inconvenience for your calendar and phone line (especially for part-time retail investors trading as a side hustle), but with no option of play-back it’s impossible to listen to calls that happen simultaneously, limiting your breadth of company knowledge and understanding.
The more I discussed this problem with fellow traders, the clearer it became that this was a sizable hurdle for the ordinary investor. Despite being empowered by the array of accessible and affordable trading platforms that exist today, retail investors still lacked easy access to the company information that they need. And so, alongside my team of co-founders, we decided to solve the problem ourselves, with an investor-relations app called Quartr.
It’s our mission to empower all investors to make better, more informed investment decisions. By centralising company information in one, easy to access and use digital space, Quartr is helping all investors navigate the stock market and reap the benefits of quality insights. From earnings calls to transcripts, slide decks to reports, investors can access both the audio and text that they need to develop their portfolio and improve their chances of investment success. By redistributing control over company information, we’re giving power to the ordinary investor, granting them access to insight wherever and whenever suits them best.
Anyone, regardless of their experience, expertise or network, should be able to invest. If we want the stock market to be truly accessible to everyone, then the solution is simple: we must democratise company information. Unless it is both easy and affordable for individuals to run due diligence on a company, then the institutions with the deeper pockets will always keep hold of the upper hand.
Only when transparent communication between retail investors and public companies becomes the gold standard will we know that our mission has been realised.