‘Influencer’ with Millions of Social Media Followers Says Robinhood and Other Trading Apps Could Do More Harm than Good for Young Investors


  • Retail apps could cause problems for young investors, according to silver expert Tori Dunlap.
  • She believes the apps do not educate their users enough and are not inclusive for minority groups.
  • Robinhood was recently forced to pay $ 70 million after FINRA accused the app of harming clients.
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Young investors, and Gen-Zers in particular, are investing their money in things like cryptocurrencies and memes stocks, drawn to social media communities who have banded together to take on the giants of Wall Street, and popularized. by retail applications like Robinhood.

As positive as it may be to see young people getting involved in their own finances, these apps could do more harm than good as they do not sufficiently educate their users and are not particularly inclusive places, according to finfluencer. ‘and personal finance expert Tori Dunlap.

Dunlap, which has millions of followers on Instagram, TikTok and Twitter and manages the personal finance education and counseling brand “Her First $ 100K”, says the problem with these apps is that they appeal to new and old. young investors who are often unaware of the risks, or what good investment strategy is due to a lack of education on the subject.

“They focus on young people, which is great, but young people who don’t really know what they’re doing. They don’t really know how to invest, don’t really know how to grow their wealth and so I think it is. is a huge risk. ” she told Insider in an interview. “Tackling this certain population is good, but what are you doing to educate them? What do you do to make them understand a risk before, you know, the risks involved before you start investing? ” she said.

Dunlap knows a lot about managing its finances. She started her first business when she was 9 and by 25 she had accumulated savings worth $ 100,000.

Retail has grown in popularity over the past 18 months throughout the COVID-19 pandemic, with apps like Robinhood or platforms like eToro experiencing booming business. But they are not without pitfalls.

Just last month Robinhood agreed to pay nearly $ 70 million to U.S. regulators to address allegations that it had misled millions of clients, approved ineligible traders for risky strategies and failed to oversee the technology that prevented millions of people from trading. This is the biggest fine ever imposed on the Financial Sector Regulatory Authority.

Along with this, retail apps and social media influencers talking about finance have pushed the idea of ​​democratizing commerce, which means anyone can do it and they don’t necessarily need to. financial professionals to help them earn money by investing.

Robinhood was not available for comment when contacted by Insider.

Dunlap said apps like Robinhood have done well in making investing more worthwhile and appealing to young people, which she says is essential for them to start getting rich early in life, but she also believes that they still have a long way to go.

Trading apps often “gamify” the activity, rewarding users with small bursts of digital confetti on their screens when they trade, or by playing small jingles to notify them of updates. There have been well-documented cases of users who have suffered the equivalent of gambling additions, for example.

Another of his qualms is that the community created by trading apps is not particularly inclusive. The lack of educational tools is a problem, but Dunlap said she thinks it goes as far as designing these apps, which she describes as “brother.”

“It’s not really democratization if it doesn’t involve minority groups, if it doesn’t also involve women, people of color and other members of other minority groups,” Dunlap said. “Yeah, it’s, like, attractive to the younger guys, but they’re not straight white hedge fund managers, they’re just straight white ‘financial brothers’.”


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