We created #WeTheInvestors and launched the Investor Bill of Rights with the fundamental premise that individual investors deserve simplicity, fairness, transparency, control and trust in our financial markets. For too long, investment firms have held themselves out as representing the interests of the very retail investors whom they productize. They maintain this status quo with an army of lobbyists and a wealth of campaign contributions. The only way to combat this effort is with our own army of individual investors, each educated and empowered to advocate for themselves through a grassroots advocacy movement. We launched this effort on March 3rd with a group of industry partners and with an amazing level of support from the retail investor community. What follows is our vision for what this movement should look like and what we hope it will accomplish over time.
Our mission is to educate individual investors on critical market structure issues that impact them, and to empower them to effectively advocate for simplicity, fairness, transparency, control and trust in financial markets.
Our vision is of a powerful, self-sustaining force in market regulation, one that is led by and for individual investors; that recognizes the will of the people; that embraces the purposeful chaos of decentralized, grassroots advocacy. Ours is an effort to prove that investors, when properly educated on critical issues, can represent themselves in this debate.
We hope that over time, this movement will be led, not by any one individual or firm, but through the collective expertise and pathbreaking ingenuity of industry insiders and former insiders. Initially, this movement will organize itself through the efforts of volunteers, potentially as a Decentralized Autonomous Organization (DAO). Subsequent steps will include identification of budgetary needs, if any, and will address questions over the formal structure of our organization as well as the top priorities for dedication of energy and resources.
Because this is a grassroots movement, the path forward will evolve over time. Today’s roadmap may not be an entirely accurate representation of the path the organization will ultimately take. This challenge does not dissuade us from trying.
Within this highly tentative roadmap is an expression of our hope for what this organization could become. Instead of trying to assign actual dates and timelines, we will talk in more abstract terms: near-term, intermediate-term and long-term:
The primary goal of this movement is to fix the dysfunction in the US equity-market structure. That means navigating current realities at the SEC with tactical precision while leveraging our resources to maximize impact. These resources include funding from Urvin Finance and our partners, and the contributions of time and energy from a burgeoning grassroots movement.
Our near-term focus will be on the issues and efforts outlined in the initial version of the Investor Bill of Rights:
Our focus will primarily be on ending payment for order flow and unnecessary off-exchange trading, to ensure that the NBBO reflects the actual supply and demand of buyers and sellers in the market. We will also push hard for improvements to best execution standards. Many of the other items can be pushed as private initiatives or as support for already proposed SEC regulations.
With a focus on payment for order flow and unnecessary off-exchange trading, we will advocate for substantive action to be taken. We will not settle for a mere change in disclosure standards. We will ensure that the SEC and Congress know that individual investors care about this issue, and that they are not represented by retail brokers or high-speed speculators. Our plan on this issue is to:
Our plan to achieve these objectives involves several different actions:
We have already begun the process of identifying candidates for #1, and have assembled a core coalition of supporters with expertise across the entire financial ecosystem for #2 and #3. One of the main actions we are pursuing in the near-term is to recruit volunteers who have experience in any of the 3 areas above and who share our passion for change. If this sounds like you, please register as a volunteer for We The Investors.
While we believe that we can successfully influence the direction of US market structure in the near-term, our vision is to be a major player in the ongoing debate over market structure for the long-term. This will require a strategic focus on structure, with an emphasis on positioning our organization for long-term strength and success. Ultimately, this should mean having a formidable presence in Washington DC, and becoming the go-to source for expertise and opinions on individual investor advocacy.
To accomplish this lofty ambition, and to create the foundation for our long-term vision, we are inspired by decentralized efforts, such as the self-organization of investors on Reddit and the DAOs of crypto. We believe that these initial efforts to understand markets and create novel systems of governance represent the future of investor advocacy and grassroots activism. We do not believe that this grassroots movement should be led and directed by any single individual or firm. This must be a true grassroots movement, one capable of adapting to shifting priorities as conditions change.
Our hope is that this grassroots movement can leverage a coalition of industry experts, while marshaling the unique scale and resources represented by tens of thousands (or millions) of individual investors. Together, these forces can ensure that markets grow to be fairer, simpler, and more transparent. To accomplish this, we propose that #WeTheInvestorsWe The Investors becomes a DAO to provide a mechanism for governance, including the establishment of parameters for how to incorporate expertise, knowledge and guidance, as well as criteria for accepting new firms into the coalition.
There are also many existing efforts focused on investor education and financial literacy, including from current coalition members. The DAO will need a clearly articulated strategy in place for partnerships in many areas, including education and advocacy.
Finally, the battle for market structure reform takes place not just in the halls of Congress or the offices of the SEC, but also in the public sphere. Public relations and marketing are critical elements of this effort. The retail brokers and high-speed speculators have convinced the press that they represent individual investors. To win this fight, we must change that false narrative. We The Investors must ultimately have a strong strategy for marketing and communications, led from within the organization.
We are necessarily focused on the US markets, as they are the largest markets in the world. But the problems in markets are not confined to any one country. Ultimately, we want to see fairer, simpler, and more transparent markets around the world, and we want to leverage our experience in advocacy and expertise in US markets to push for changes everywhere.
We must also ensure that we are forever vigilant as markets evolve. We must be intellectually honest as new data emerges, even when it challenges our existing beliefs. And we must not let politically powerful interests again hijack the regulatory agenda, undermine the legislative process, or otherwise corrupt market structure and design.
We cannot predict what this organization will look like in 5 or 10 years, and the very premise of a DAO is such that we neither can, nor should, attempt to control that evolution. We The Investors should evolve as markets, technology, and the world evolve. However, we can establish a set of principles and objectives that our organization will aspire to, and which we believe will be a recipe for long-term success:
We have witnessed an exciting confluence of forces. The power of off-exchange internalizers has become more concentrated and order routing arrangements have more egregiously departed from best execution requirements. The SEC has a Chair who has indicated support for ending these practices, and Congress has signaled interest in the issue as well. Popular media programs like Jon Stewart’s The Problem and the HBO Max documentary Gaming Wall Street have cast a glaring spotlight on the inequality at the core of our markets. Retail investors are rising up, in both number and awareness of underlying structures and systems, and showing that they care about this issue. Today, we have a real opportunity to change US policy.
While we believe that focusing on this issue will provide the most likely path to success, we will not lose sight of other critical issues. We will ensure that we make resources available to empower individual investors by educating them on emergent policy proposals, the underlying issues, and the actions we believe could and should be taken.
Yet the answers to these issues are not solely to be found in legislation and regulation. Private companies can play a foundational role in creating simpler, fairer, more transparent and fair markets. We will support this movement’s efforts as it encourages private companies to change the way they operate, and to improve the choices they offer their clients. There is no need to wait for government intervention around issues such as control over stock lending, or the ease of directly registering shares. Retail brokers must be made to understand that their customers desire and deserve transparency. Retail brokers must be made to recognize that their customers will accept nothing less than full control over their positions and data.
These converging forces are bringing us to a point of inflection. The time to strike is NOW!