Finance Magnates met with Dominic Poynter, recently appointed Chief Marketing Officer at HYCM, to discuss industry trends and the company vision moving forward.
How have investing dynamics been changing and what does it mean for the industry?
The global capital markets industry is seeing a rise in retail investing with significant growth noticeable after the pandemic. This major trend is here to stay and shape the future of financial services. In fact, it is projected that the number of assets non-professional investors manage will be over 61% by 2030, making the retail investor one of the major participants to move and influence the markets. Although this may seem like good news for FX and CFD brokers like us, it comes with certain challenges for individual investment service providers, as well as for the industry as a whole.
Firstly, retail investors are becoming more sophisticated and demanding, and the industry needs to adapt to meet their needs. This includes providing easier access, better trading conditions, new types of products, and simplified trading platforms. New technologies are here to help but brokers must have the resources and flexible structures needed to keep up with its rapid developments to stay competitive.
Secondly, according to several reports, there is a financial literacy gap among retail investors. The majority are eager to learn, but there are still many new investors who do not know where to start. This tends to be the most common hurdle to individuals beginning their investment journey. Moreover, those who already hold assets admit that their knowledge is limited too. Therefore, the industry needs to find ways to help investors navigate the volatile markets and provide educational resources to close the financial literacy gap.
And lastly, as investors seek long-term financial security, trust becomes one of the key factors in deciding in favour of or against investing. The industry should strive to create a favourable reputation, and this is only possible if individual financial institutions take steps to protect their clients by being transparent and trustworthy.
To sum up, we believe that easy access, financial education, and trust are the key areas to focus on to build a responsible ecosystem that supports the empowered investor.
There are plenty of educational materials available online, why is there still a financial literacy gap?
The financial literacy gap among investors is still a significant problem because many of them lack a basic comprehension of the financial markets and trading concepts, which can lead to poor trading decisions and financial losses. And although there are educational materials available online, there are a couple of things that are not taken into consideration. Retail investors need access to high-quality educational resources that can help them understand the risks and rewards of investing. Many of those who offer educational material provide limited and fragmented material that often does not aid the learning process.
As the internet, where literally anyone can be an “expert”, becomes the number one source of information, it is becoming increasingly important to use only reliable and vetted sources. Also, more people are now gathering information through social channels and video content, so education providers must follow these trends and offer content in the preferred formats and channels if they wish to reach their audience.
Lastly, the information should be simplified. The use of complex financial vocabulary and trading terminology can often make it difficult for investors to access and understand the material.
At HYCM, we plan to address all these factors and are working on a one-stop solution for financial education which will be available in the near future. We currently offer educational courses, regular online webinars and workshops, in-person seminars, and one-on-one coaching, and our HYCM Lab blog provides vast information on how the financial markets move. Our clients also have access to premium trading tools including signals, a research terminal, and calendars to facilitate smarter trading decisions.
What steps have you taken to provide easy access to investing so far?
One may think that retail trading is already widely accessible but while it is certainly more accessible than before, there are still many boxes that need to be ticked, such as providing simplified trading technology, lowering costs, as well as offering innovative products.
This year we launched our own proprietary mobile app, HYCM Trader, which combines our client portal and trading functionality, enabling users to register, create and manage accounts, buy and sell financial products, and deposit and withdraw, all within one unified environment. It is a remarkably simple app to use with a modern interface, responsive charts, and enhanced functionality, providing easy access to the financial markets.
We also now offer over a thousand world-leading stocks to invest in with zero commission [1, 2], thus lowering the barrier to entering the equity market. Our clients can invest in their favourite companies including big names, such as Netflix, Microsoft, Tesla, Starbucks, Disney, and Nvidia, buy fractional shares for as low as $10, and earn income from dividend-paying stocks.
In addition to that, our major FX and bullion instruments now feature updated spreads on all account types, some as low as 0.1 pips, to offer the best possible trading terms to our clients.
Another notable mention is that our clients can invest in the most popular cryptocurrency CFDs [1], as well as deposit in their preferred coin.
What is the role of trust in the financial industry?
The world of investing is highly dynamic, and risk and volatility are two aspects which must always be taken into consideration. As investors seek long-term financial security, trust emerges as a key factor in shaping their decision-making process. Therefore, investors place immense value on the reputation and credibility of financial institutions before committing their hard-earned capital.
So, it is imperative for financial institutions to prioritise building trust and transparency, protecting their clients’ interests, and establishing clear communication to build long-lasting relationships with investors. As the industry strives for further growth and development, the trust factor will remain a key determinant of success. Embracing a culture of trust will not only benefit investors but also foster a robust and sustainable financial ecosystem for all stakeholders involved.
With 45 years of cumulative group experience, HYCM has established itself as an industry expert renowned for its excellence and recognised as one of the most reliable brands in the industry. Operating from strategically located offices in major financial centres, including the UK, Cyprus, UAE, Kuwait, and Hong Kong, HYCM extends its exceptional services to clients worldwide. Regulated by the world’s leading regulatory bodies including the FCA, CySec, DFSA, and CIMA, HYCM offers a safe and secure environment to invest in new and traditional financial markets.
Our commitment to client protection and maintaining the highest industry standards is evident through measures such as segregated accounts in Tier-1 Banks [3], the provision of client fund insurance through FSCS & ICF[4], compliance with MiFID, negative balance protection, VeriSign encryption, and fair trading practices.
In conclusion, focusing on areas of access, education, and trust presents an opportunity for the financial services sector to enhance its support for retail investors, helping them to realize their financial aspirations. At HYCM, we strive to embrace these pillars to empower modern investors with the tools, knowledge, and confidence needed to navigate the complexities of the financial markets.
1 Certain products & services mentioned herein may or may not be available to all clients depending on which HYCM Capital Markets Group entity their trading account(s) adheres to.
2 Other fees may apply such as withdrawal fees, dormant account fees, swaps, and spreads.
3 For FCA, CySEC, and CIMA clients.
4 Protection by Financial Services Compensation Scheme for FCA clients and the Investors Compensation Fund for CySEC clients.
About: HYCM is the global brand name of HYCM Capital Markets (UK) Limited, HYCM (Europe) Ltd, HYCM Capital Markets (DIFC) Ltd, HYCM Ltd, and HYCM Limited, all individual entities under HYCM Capital Markets Group, a global corporation operating in Asia, Europe, and the Middle East.
High-Risk Investment Warning: Contracts for Difference (‘CFDs’) are complex financial products that are traded on margin. Trading CFDs carries a high degree of risk. It is possible to lose all your capital. These products may not be suitable for everyone, and you should ensure that you understand the risks involved. Seek independent expert advice if necessary and speculate only with funds that you can afford to lose. Please think carefully whether such trading suits you, taking into consideration all the relevant circumstances, as well as your personal resources. We do not recommend clients post their entire account balance to meet margin requirements. Clients can minimise their level of exposure by requesting a change in leverage limit. For more information, please refer to HYCM’s Risk Disclosure.
**This material is considered a marketing communication and should not be construed as containing investment advice or an investment recommendation, or an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. HYCM does not take into account your personal investment objectives or financial situation. HYCM makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast, or other information supplied by an employee of HYCM, a third party, or otherwise.
