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News Release

Angelita Williams (202) 728-8988

FINRA Launches Educational Initiative Aimed at Newer Investors

FINRA and FINRA Foundation Issue Special Notice Soliciting Comment on Ways to Reach and Educate Novice Investors

WASHINGTON—FINRA today announced it has launched a multi-year, multi-faceted $30 million initiative to explore innovative ways to reach and educate investors, especially new, self-directed retail investors who conduct transactions through online accounts or using mobile apps.

As phase one of the initiative, FINRA and the FINRA Investor Education Foundation (FINRA Foundation) today issued a Special Notice soliciting input from firms, investors, investor advocates, academics and other stakeholders concerning effective ways to reach these new investors. Comments are requested by August 30, 2021.

During phase two, FINRA and the FINRA Foundation will launch a comprehensive program aimed at educating this rapidly-growing segment of novice retail investors who are leveraging advancements in technology to enter U.S. securities markets.

“Greater retail investor participation in our securities markets creates greater opportunity for these investors to accumulate wealth and achieve their long-term financial goals,” said Robert Cook, President and Chief Executive Officer of FINRA and Chair of the FINRA Foundation. “It is critical that newer investors understand both the benefits and the risks of participating in the financial markets. I am pleased that FINRA’s Board of Governors approved an initial investment of $30 million dedicated to help educate this segment of our investor population.”

Earlier this year, the FINRA Foundation published a study, Investing 2020: New Accounts and the People Who Opened Them, which found that newer investors had lower levels of financial knowledge relative to experienced investors. The data also showed that market dips that made stocks cheaper to buy and the ability to invest with small amounts were among the top reasons new investors reported entering the stock market. And, for respondents who opened new accounts in 2020, investing for retirement was the most frequently cited reason for opening the account.

In response, FINRA and the FINRA Foundation request comments on effective ways to educate investors, including which methods of reaching investors have worked best to increase investor knowledge among self-directed retail investors.

According to the FINRA Foundation’s latest investor survey, investor knowledge in the U.S. is low among all investors and many are confused about the various fees they pay for investing.

“It is imperative that we effectively reach all investors, and especially the newest generation of investors who are more comfortable trading on smartphones and more likely to seek input on investment decisions from friends, family and online sources,” said Gerri Walsh, President of the FINRA Foundation. “We know that engaging people in educational experiences, whether face-to-face or mediated by technology, can be challenging—and that is why we welcome feedback from a diverse array of stakeholders on how best to reach those who opt not to work with registered financial professionals.”

About FINRA
FINRA is a not-for-profit organization dedicated to investor protection and market integrity. It regulates one critical part of the securities industry—brokerage firms doing business with the public in the United States. FINRA, overseen by the SEC, writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and brokerage firms and their registered employees. For more information, visit www.finra.org.

About FINRA Investor Education Foundation
The FINRA Investor Education Foundation supports innovative research and educational projects that give underserved Americans the knowledge, skills and tools to make sound financial decisions throughout life. For more information about FINRA Foundation initiatives, visit www.finrafoundation.org.