Building relationships with modern retail investors is a long game – but it’s an investment worth making. Their smaller starting balances means they’re often overlooked by financial platforms targeting customers with more cash on hand. That’s a missed opportunity.

Data from Modern Investor Pulse, our quarterly survey of thousands of modern retail investors, shows that first-time investors spend significantly more money later down the line, once they’ve developed their knowledge and confidence. Think of it like accruing interest: the longer they’re in the market, the more valuable they become. That means there’s a huge benefit to acquiring investors early, and creating |“land and expand” content strategies that support them while they hone their skills.

First-time investors are a diverse group, and attracting and engaging them requires a solid understanding of who they are, where they are now, and what they care about. Here are the five things financial platforms need to know: 

1. Investors start small…

Understandably, the majority of modern investors exercise caution when it comes to their first investment.

While around one fifth (21%) are a little bolder, investing initial amounts between $1,000 and $4,999, almost 60% start off with small amounts of between $10 and $1,000. 

Most investors start off at the lower end of the spectrum, but that doesn't mean they're not valuable customers for financial platforms. Investing in them today is likely to pay dividends into the future, so it’s crucial to understand what those first steps look like and help them to get started on their investment journey. 

2. …but they invest more over time

Investors that start small don’t stay that way forever. Our data shows that with more time in market, investment amounts increase significantly.

Almost half (46%) of investors that have been investing for three or more years started investing with less than $500. And of those that plan to invest more than $10,000 this year, over a third (36%) started with an investment of less than $500. 

It’s no surprise that investors who have been in the game longer have more capital to invest. That’s partly because they’re likely to be older, boastinge more disposable income or investments that have already matured. But it’s also because they’ve had time to learn about the industry, and gained the knowledge they need to invest with confidence. To get them to that point, it’s crucial to equip them with educational content: educated investors are proven to invest more and churn less.

3. IRL > influencers

First-time investors aren’t easily influenced – at least, not by the multitude of “finfluencers” and robo-advisors cropping up on social media. We found that social media served as a catalyst for less than 10% of firsttime investors. That tracks with data from our wider investment community that found that 42% of investors now use social media “significantly less” than they used to for investment advice.

Instead, 46% of first-time investors entered the market following a conversation with someone that invests. It shows how highly they value impartial, expert advice, and how important that is to their decision-making process. 

So an omnichannel strategy is more important than ever. Social media is still an important tool for raising awareness, but events and networking opportunities are crucial for conversion.

4. It’s not all about crypto

There’s a common misconception that first-time investors gravitate towards high-risk, high-reward assets like crypto. Our data proves it’s not true: in fact, less than 10% of retail investors made their first investment in cryptocurrencies.

In reality, stocks are far and away the most popular choice for first-time investors. 57% plumped for stocks their first time out, followed by ETFs, which were the preference for a little under 11%. 

Interestingly, this pattern is similar to that seen among more experienced investors, who also prefer stocks and ETFs over cryptocurrency. It’s an important reminder for financial marketers to do their due diligence, and make sure they’re creating content that reflects what investors actually care about – not what they’re assumed to.

5. Men and women invest differently

Likewise, the profile of first-time investors might look a little different to what financial marketers expect.

Our data shows that it’s actually women who go bigger on their first investments: they’re more likely to invest $10,000 or more than men are. It’s not just their budget, but their preferences that differ: while men lean towards stocks, women have more appetite for ETFs or managed portfolios.  

If first-time investors are often overlooked, female first-time investors are even more so. Clearly, that’s an expensive error to make. It’s important that marketers take the time to understand all their customers, and map content journeys based on informed predictions about which investment products certain investors are most likely to engage with.

To find out how Finimize can help you create content that speaks to first-time investors, get in touch.