The r/wallstreetbets meme stock frenzy was, arguably, an unprecedented moment in retail-trading history. Companies like AMC and GameStop saw their stock prices depart wildly from their fundamental value, spiking as much as twenty times over their current price on the stock market. While the ultimate victims were retail traders who saw their savings wiped out, trading platforms also suffered major damage—both financial and reputational. 

Chief among them was Robinhood. As TechCrunch reported in July 2022, Robinhood almost collapsed during the peak of meme stock trading; with a collateral deficit of almost $3B, it struggled to “keep the lights on” with “things barely held together.” A decision to pause trading on select stocks helped the platform survive, but spelled doom for many investors.

With the fiasco largely behind us—preventative regulatory changes are still in the works—how have trading platforms attempted to market themselves and grow in the wake of this branding SNAFU? 

Diversified portfolios

One part of Robinhood’s reputational recovery attempt has involved building out new products that showcase the benefits of long-term thinking when it comes to wealth management. The company’s new IRA product, for instance, is the only one of its kind with a match. The company also offers options trading within retirement accounts. 

By offering a broader range of products, Robinhood is both attempting to mitigate risk internally by diversifying its own revenue streams as well as wooing other customer bases, such as those more interested in long-term retirement products. 

Guardrails

Public, meanwhile, has changed how it brands certain investment vehicles. The platform created a pop-up warning that cautions potential investors about the volatility of specific stocks. “We rolled this out during the GameStop bonanza,” said Sam Nofzinger, GM of Brokerage + Crypto at Public.

“It’s just this little speed bump to remind you that you might be doing something a bit more risky than you might have intended,” Nofzinger noted. The trading platform has since expanded the warning label to other asset classes—most recently OTC stocks. 

Through those guardrails, Public can both demonstrate an interest in customers’ long-term financial wellbeing, while both expanding client bases as well as reducing its own exposure to risky investments.

Educational content

Creating informative content can help market internal expertise while also letting trading platforms gain a competitive edge against alternative platforms through savvy SEO moves. In an interview with The Financial Revolutionist, MoneyLion’s Chief Customer Officer, Cynthia Kleinbaum, outlined how the company’s content through its MoneyLion University Program has been built to grow and mature along with customers. 

“We hope that viewers and students gain money skills, and learn more about money, but also we hope to make an inclusive program that helps them throughout the different milestones in their life: from their first paycheck, to tax refund, building their credit score, and the like,” she said. 

We should expect to see trading and investing platforms move further into content creation, deploying strategies to retain customers, steer them into more profitable streams—and even poach investors away from competitors.