Another Retail Direct Investing Boom is Here: It’s Time for Financial Advisors to Collaborate

The financial services industry is, once again, witnessing a surge in the popularity of retail direct investing platforms, with prominent examples like Fidelity, Robinhood, and Charles Schwab leading the charge. From 2022 to 2023 alone, assets in the retail direct channel surged by 22.2%, adding $2.5 trillion, according to new research from Cerulli Associates.

Evolving mobile-first technologies and user-friendly platforms have made it easier than ever for retail investors to manage their own investments. These days, trading fractional shares, implementing automated portfolio rebalancing, and using AI-driven recommendations can all be done with just a few taps on a smartphone.

However, this is not the first time retail direct investing has experienced a period of seemingly transformative growth. In fact, there have been multiple waves over the last 50 years.  The 1970s and 1980s saw the emergence of discount brokerages, led by Charles Schwab, which dramatically reduced trading costs and opened the market to smaller investors. The 1990s, including the dot-com boom, witnessed the rise of online trading platforms, enabling individuals to execute trades from their personal computers. Most recently, the COVID-19 pandemic triggered a retail investing boom in 2020-2021, driven by factors such as stimulus checks, increased free time during lockdowns, and the wide-spread availability of commission-free trading apps.

Yet, despite the cyclical interest in retail direct investing, other data consistently reveals that professional advice provides unique value, helping investors manage emotions, stay disciplined, and navigate complex financial landscapes. In the immediate term, retail direct channels seem poised to continue to attract more assets. But, over the long-run, astute financial advisors consistently deliver value through holistic planning, behavioral coaching, and guiding clients through volatile markets and life transitions will never be going out of style. Markets will always fluctuate, but the fundamental need for sound financial guidance remains constant.

Understanding the Current Retail Direct Revolution

Millennials and Gen Z investors, who are naturally comfortable with digital solutions and online communities, seem to be gravitating towards do-it-yourself (DIY) platforms as a way to save on costs and make investment decisions independently.  At the same time, do-it-yourself DIY investment-related content has become ubiquitous. An endless array of websites, online forums, and social media channels promote self-education on investing strategies and platforms like Reddit help retail investors feel connected to a broader community.

This shifting landscape suggests these investors are attracted to convenience, control, and affordability. Yet, as appealing as the attributes of these platforms may be, they can also fall short and prove costly to the investors who rely on them exclusively. This is especially true when DIY investors face market challenges that require advanced knowledge, personalized solutions, and behavioral discipline.

Where Retail Platforms Can Fail to Deliver

The most evident shortfall of retail direct platforms is the lack of bona fide personalization. To be sure, these platforms can administer basic risk-tolerance assessments, and even suggest ideas for portfolio construction, rebalancing strategies, or basic tax-loss harvesting — but they are designed for the masses, not for individuals with unique needs. High-net-worth investors, business owners, or those navigating major life transitions need far more attention and customization than templated advice could ever provide. Complex financial situations demand tailored strategies that account for every detail of a client’s financial life, something that an algorithm, no matter how well designed, simply cannot provide.

Emotional decision-making is another area where retail investors are left vulnerable when relying solely on retail direct platforms. Without professional guidance, self-directed investors are prone to behaviors that eventually undermine their financial goals, such as panic selling during downturns, performance chasing, or overtrading. In this light, behavioral coaching is one of the most valuable services a professional advisor offers. Acting as an emotional circuit breaker, an advisor can help clients remain disciplined during volatile markets and stay focused on their long-term objectives. Research like Vanguard’s Advisor Alpha framework highlights how behavioral coaching alone can add between 1.5% to 2% in annual net returns, proving its significant impact on client outcomes.

The knowledge gap is another limitation of the DIY approach. Retail investors often “don’t know what they don’t know,” leading them to overlook critical aspects of comprehensive financial strategy. Key areas like tax optimization, retirement income planning, and estate management are frequently ignored or poorly implemented. For many self-directed investors, the focus remains on minimizing fees, yet the cost of missed opportunities or uninformed decisions often outweigh any perceived savings.

The Certified Advisor Advantage

Still, in an environment where technology has commoditized basic portfolio management, financial advisors must clearly articulate their value — and continue to build it out. Ultimately, the value proposition for financial advice is in trained expertise, behavioral insight, and holistic wealth management. These characteristic are the hallmarks of certified professionals holding credentials like the Institute’s Certified Investment Management Analyst® (CIMA®), Certified Private Wealth Advisor® (CPWA®), and Retirement Management Advisor® (RMA®) certifications.

Earning these designations requires mastery of complex topics such as tax-efficient investing, multi-generational wealth planning, business succession, and retirement income strategies. Unlike retail direct platforms, an Institute-certified advisor can bring the knowledge and skills necessary to deliver sophisticated solutions for clients with intricate financial lives.

Most importantly, when considering the current resurgence of interest in retail-direct investing, advisors should position themselves as a trusted intermediary between self-directed and professionally managed accounts, expressly communicating that they are willing and able to support the “hybrid investors” who use both strategies. By being receptive to client interest in self-directed investments, Institute-certified advisors can seize the opportunity to reiterate the concept of broader financial planning and its important goals, transforming a potentially fragmented effort into a cohesive strategy.

This open-minded approach also underscores the collaborative nature of any good advisor-client relationship. As retail direct platforms continue their rapid growth, savvy advisors can cater to client interest in convenience and control, while continuing to advocate for comprehensive plans and strategic direction. This makes the advisor not just a trusted guide, but a true fiduciary partner in helping clients achieve their most important objectives.