October 24, 2022
When retail investors discover TiiCKER, some have questions about how stock perks work. So the editorial team periodically digs into our mailbag to answer some common questions about TiiCKER. We want you to get the most out of the platform that rewards shareholders for simply owning stock in their favorite companies.
Question: “I am a C-suite executive at a Fortune 1000 company. I’ve heard a lot about TiiCKER from friends and colleagues who are at other companies that offer shareholder rewards to individual investors on the platform. I understand why institutional investors are so important to my company. Institutional investors are known to improve price discovery, increase allocative efficiency and promote management accountability. But TiiCKER is focused on the retail investor, the kind of shareholder that might have just a few shares of our stock. I don’t mean to be glib, but why should my company care about this seemingly insignificant group of investors?” – Steven V., New York
Answer: Whoa there Steven. Individual investors are anything but insignificant, though we get questioned about the value of this investor class often, so your thought process is not unusual. Still, we don’t think this view takes into consideration the full, current picture of the individual investor.
Courting individual investors has gone in and out of fashion for decades. Prior to the mid-1960s, individual investors were the kings and queens of Wall Street. Companies fawned over them. Starting in the 1960s though, the role of the retail investor declined thanks to institutional investors who pumped billions of dollars into the market through the assets they managed. These institutional investors that invest other people’s money through mutual funds, banks, insurance companies, pension funds and hedge funds began to dominate the volume of trades on Wall Street.
Companies followed the money, and the retail investor was all but forgotten except for a few direct stock purchase programs and dividend reinvestment schemes. It is easy to fall into the trap of thinking that individual investors don’t matter. After all, there aren’t many of them around and they invest such small amounts that it doesn’t really matter, right? That kind of thinking is dead wrong.
After decades in decline, the retail investor is back on the rise in the eyes of Wall Street and the pandemic solidified their position even more. If there’s anything we’d like you to take away from this post, Stephen, it’s that retail investors are powerful, loyal and they are already fans of your company. Simply put, they truly care about the products you make and the services you provide. Why wouldn’t you want to connect with them in a meaningful way and reward them for their loyalty?
Who are these retail investors? They run the gamut from day-traders who are constantly monitoring the market to individual shareholders who passively control their own retirement funds. Retail investors also include a growing number of hobbyists who took up investing during the pandemic and true speculators looking for quick returns. The ranks of individual stockholders have grown rapidly along with technology that makes trading quick and easy. Investing in equities has never been easier or less expensive. Anyone with a smartphone and a bank account can buy and sell stock.
If you still aren’t sold, Stephen, perhaps some statistics might help convince you. Retail investors’ share of total equities trading volume is now approaching 25%, up from 20% in 2020 and 10-15% the preceding decade, according to BNY Mellon. U.S. households and nonprofits increased their direct and indirect holdings of stocks to 43% of total financial assets as of April 2021. That is a watermark representing the highest level recorded since 1952, according to Federal Reserve data. Research reveals that approximately 8.5%-10% of American adults opened a new taxable investment account in 2020, with about 3%–5% being these investors’ first accounts, according to a 1,300- household national survey conducted by NORC at the University of Chicago and the FINRA Foundation.
The idea behind TiiCKER is simple: Help companies reward these loyal investors and help retail shareholders connect with perks for owning shares. Companies simply need to contact TiiCKER and we’ll do the rest by connecting this important group of individual investors with shareholder rewards you might already have in place or help you come up with a package of perks that will connect them to your brand. Individual investors looking for shareholder rewards can find them on TiiCKER by connecting their brokerage account to the platform.
Again, one of the most important factors for companies to consider when thinking about the “why” behind offering shareholder rewards is loyalty. These investors actively decided to buy shares of your company’s stock and they tend to hold shares a lot longer than institutional investors. In short, if a retail investor owns shares in your company, they do so for a reason. They care about your company. You should care about them and reward them too.
Want to know more about getting your public company on the TiiCKER platform? Drop us a note at email@example.com.
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