SoFi may warn users who might be day trading about the potential risks of doing so, CEO Anthony Noto told CNBC on Thursday.
“We’re looking at implementing different technologies to push notify them when we see active trading at a significant level in terms of number of trades to help educate them,” Noto said on “Closing Bell.”
But as of now, Noto said most users of the fintech company’s investing service, known as SoFi Invest, are not executing huge amounts of daily trades. In fact, Noto said less than 1% of SoFi’s funded accounts complete more than three trades per day.
“We’re taking the responsibility seriously, whether it’s margin lending or options or investing in cryptocurrency, to make sure these are the right products for our members for the long term,” said Noto. He added that SoFi offers the ability to schedule appointments with financial planners through its app.
The coronavirus pandemic has helped usher in a new wave of investors through online brokerages such as Robinhood, TD Ameritrade and Etrade. SoFi, for example, has seen the number of its investor accounts double in 2020, Noto told CNBC last month.
Some people, such as CNBC’s Jim Cramer, have advised that inexperienced retail investors need to be aware of potential risks in the market, particularly when it comes to day trading beaten-up stocks.
“It’s a little disheartening to see all the $1 to $3 stocks that people are gunning,” Cramer said on June 4. “It’s not mine to judge. If you want to try and make money and it’s legal, that’s fine. But it’s not investing.”
“Our favorite kind of retail investor is your long-term retail investor who builds their wealth over time through investing. There is risk in being a short-term, market-timing participant, and it does make me nervous,” Clayton said. “People are perfectly able to do it. We let them do it. But just remember, there is risk in short-term market movements.”
SoFi, founded in 2011, clocked in at No. 8 on CNBC’s 2020 Disruptor 50 list, released Tuesday. The San Francisco-based company initially focused on refinancing student loans for millennials but has gone on to expand its financial products to offer personal and mortgage loans. Last year, it launched SoFi Invest and SoFi Money, a cash management account.
“We’ve really endeavored to try to help first-time investors and novice investors find investing more accessible,” Noto said. “If you’re going to achieve our mission of helping individuals achieve financial independence, investing is an absolute imperative.”