What is the difference between a Retail and Non-Retail Investor? (2024)

FAQs

What is the difference between a Retail and Non-Retail Investor? ›

Retail Investor- Any individual or non-professional investor who buys and sells securities or funds that contain a basket of securities, such as mutual funds and ETFs. Non-Retail Investor- Any investor who uses the money of others and invests on their behalf.

A retail investor is an individual or nonprofessional investor who buys and sells securities through brokerage firms or retirement accounts like 401(k)s. Institutional investors do not use their own money—they invest the money of others on their behalf.

A retail investor, also known as an individual investor, is a non-professional investor who buys and sells securities or funds that contain a basket of securities such as mutual funds and exchange traded funds (ETFs).

The Endowus Fee is the same for Retail and Accredited Investors. However please note that Accredited investors are assumed to be better informed, and better able to access resources to protect their own interests, and therefore require less regulatory protection.

The three types of investors in a business are pre-investors, passive investors, and active investors.

Retail Investor- Any individual or non-professional investor who buys and sells securities or funds that contain a basket of securities, such as mutual funds and ETFs. Non-Retail Investor- Any investor who uses the money of others and invests on their behalf.

(6) “Retail investor” means any person other than an institutional investor, regardless of whether the person has an account with a member. (7) “Covered investment fund research report” has the meaning given that term in paragraph (c)(3) of Securities Act Rule 139b. (b) Approval, Review and Recordkeeping.

However, retail trading is also hazardous and challenging, and most retail traders end up losing money. According to various studies and reports, between 70% to 90% of retail traders lose money every quarter.

Retail investors are non-professional individuals who invest money in their own accounts through brokerage firms. Retail investors may manage their own accounts, or hire a professional to guide their investment decisions. Retail investors typically make smaller transactions compared to institutional investors.

What happens if you invest as a non-accredited investor? ›

Non-accredited investors are limited by the SEC from some investment opportunities for their own financial safety. The SEC also set regulations on the disclosure and documentation of the investments available to the investors. For example, non-accredited investors are eligible to invest in mutual funds.

The primary difference between Non-Institutional Investors and Retail Investors is that Non-Institutional Investors typically deal with larger investment amounts and may have access to more sophisticated investment opportunities, while Retail Investors generally invest smaller personal funds and participate in standard ...

The benefits of being an accredited investor include access to unique investment opportunities not available to non-accredited investors, high returns, and increased diversification in your portfolio.

The most common is through dividends. Dividends are a distribution of a company's earnings to its shareholders. They are typically paid out quarterly, although some companies pay them monthly or annually. Another way companies repay investors is through share repurchases.

Retail investors typically invest in stocks and bonds but mostly in stocks since bonds are notoriously difficult to trade on most trading platforms.

“Most research suggests the right number of stocks to hold in a diversified portfolio is 25 to 30 companies,” adds Jonathan Thomas, private wealth advisor at LVW Advisors.

Since less than 20% of U.S. households are considered accredited investors, the pool of retail influence is vastly smaller than it is for public markets. Furthermore, there isn't a publicly published stock price in the private markets.

Most have less than five years of investing experience and own as little as $10,000 or as much as $100,000 in investible assets. Traditional Investors includes Millennials and Generation X investors in their mid-20s through 40s, generally with a college education and $50,000 to $100,000 in annual income.