John McCrank

(Reuters) – Wall Street’s veterans gathered for their first conference in person since the pandemic. The focus was on the emerging issues, from meme stocks to cryptocurrencies, and trading apps. This signaled a new era of finance.

Washington was host to more than 460 politicians, financial regulators, and finance executives. Another 800 people tuned in via the internet for the Security Traders Association annual conference. The event, which is better known for rehashing old decades-old problems, such as trading fees, market data, and advances in algorithmic trade, attracted over 800 attendees.

This year’s meeting, however, concluded on Friday. It follows a remarkable few months, in which millions upon millions of young retail traders have gathered in online forums to trade through low-cost apps and often piled into “meme stock” – most notable being GameStop (NYSE) in January.

That episode’s volatility was a popular theme. Many participants felt the issue hit close to home. Several said that their children were drawn to the market by retail brokers. Charles Schwab (NYSE:) Fidelity and Corp followed Robinhood (NASDAQ) Markets’ and decreased commissions.

Robinhood reported that it has 21.3 million users with average age 31. Half of these are first-time investors. Robinhood is trying to attract new users to college campuses by offering $15 investment and $20,000 in tuition.

Bill Huizenga (Republican lawmaker), who is the father of five children, ages 15-24, said, “I’m delighted that my kids even talk about trying to save and invest in the future.”

He added, “I believe we should be encouraging it.”

Eric Pollackov is the global head for ETF capital markets, Invesco. He marveled at how his college-aged son used a smartphone app to purchase an ETF-traded Fund created by his company that tracks U.S. investment-grade corporate bonds.

He said, “What I really love about this industry is its adoption rate by all kinds of investors.”

Many participants were excited about the new investment class’s emergence, but others raised concerns. Following the GameStop scandal, the Securities and Exchange Commission launched a consultation to examine game-like prompts that brokers use in order to facilitate transactions. The concern is that these prompts could lead young investors into placing risky trades.

Allison Lee, Democratic SEC commissioner said that trading apps are used by her five children who are all in their 20s or 30s.

They tend to get bored talking to brokers about market risk, she stated. But, she wanted to make sure that brokers disclose all potential conflicts and income sources to everyone so they are transparent.

Cryptocurrencies have also attracted young investors including Christopher Giancarlo (ex-Commodity Futures Trading Commission Chair), who is well-known among crypto-evangelists for being #CryptoDad, which he supported the industry.

A conversation he had with twenty-somethings on a family ski trip led to him recognizing that there was a gap between generations.

“They intuitively obtain digital money,” he stated.

SEC chief warns about widespread fraud with cryptocurrencies

Jim Toes, head of STA, stated that protections are needed for investors in this new group. He also noted that Jim’s 23-year old son was participating in the market for his first time.

It also “kind of renews that sense of responsibility that all of us have to be guardians of marketplace,” he stated. “And making sure we leave something more for the next generations.”