Well-functioning markets are critical to prosperous global economies. However, from Nasdaq’s unique position at the intersection of capital markets and technology, however, we also know that well-functioning markets require all market participants to have the proper financial education and resources to make informed financial decisions. The knowledge and application of various financial skills, from budgeting and personal financial management to investing and asset allocation, is essential for people of all backgrounds to participate in the capital markets and create long-term, generational wealth. However, even more than a decade after the Financial Crisis of 2007-2009, financial literacy resources often remain deficient for many people, particularly people of color. While a recent FINRA study found that U.S. adults’ financial capabilities have grown despite the pandemic disruption, the research also showed that Americans’ financial well-being remains uneven across different demographic groups.
As part of Nasdaq’s purpose to advance inclusive economic progress, we recognize the importance of financial literacy as a powerful tool in democratizing capital markets. Over the past several years, we’ve formalized our commitment to increasing market participation and providing the necessary resources for underserved communities. Across our business, our purpose is embedded within our work—from creating online educational resource centers to increasing transparency around market data for all participants.
By providing underserved communities with resources to enhance their financial literacy, we can better empower them to participate in an ecosystem that supports and sustains their growth.
In the spirit of Nasdaq’s renewed purpose, we launched the Smart Investing portal to inform the general public on all elements of retail trading and investing. The educational hub includes a range of resources on the principles of investing, from how diversification can help reduce risks to how ETFs and options work. As the markets constantly evolve with new investment vehicles and asset classes, we are constantly working to provide new educational resources, organized into various categories, including an introduction to investing, the fundamentals, money matters, trading essentials and everyday economy.
We believe greater access to educational resources can help drive increased investor engagement from all ages, genders and races. The Smart Investing portal’s tools aim to help seasoned and novice investors make more informed decisions about saving, trading, and protecting their money.
Alongside Smart Investing, Nasdaq’s Office of the General Counsel launched The Role of an Exchange campaign, sharing its unique insights so that all investors can navigate the markets of today while saving and investing for tomorrow. Retail investors can discover how exchanges, such as Nasdaq, are working to protect investors in myriad ways, including through their listings, membership, surveillance and enforcement functions. Retail investors can also learn more about the benefits and risks of SPACs, direct listing and exchange-traded funds, as well as the technology driving the future of market regulation.
This year we sought to expand our educational resources, partnering with the TRIBE Freedom Foundation, a non-profit organization raising funds to fight modern slavery and end human trafficking, to create a survivor financial empowerment portal designed to equip financial institutions and survivor support organizations with the tools needed to empower survivors of modern slavery. Together, we are helping to promote long-term financial well-being, freedom and stability.
In addition to these fundamental education resources, Nasdaq is also working to prepare investors for more complex areas of the capital markets, specifically derivatives and digital assets.
Nasdaq Derivatives Academy offers a variety of courses developed in close partnership with leading international partners and Nordic market participants. Meanwhile, the Nasdaq Advisor Academy provides the financial advisor community with 12 courses on digital assets, ranging from Blockchain and Bitcoin to the Metaverse and non-fungible tokens.
Access to Market Data
Beyond purely educational resources, we released a new bid/ask feature on Nasdaq.com that showcases the best bid, best offer, volume, and last sale information for all U.S. exchange-listed securities based on liquidity on the Nasdaq Market Center. This marked the first time that Nasdaq has publicly displayed level 1 market data on its website, often referred to as quote data.
In a recent survey on Nasdaq.com, 63% of respondents reported that they were interested in “Prices & Volume” data. While this data is traditionally thought of as something used by professional investors, now all investors, regardless of their professional status or standing, can power their trading decisions with bid/ask data.
By providing greater access to real-time bid/ask data for all U.S.-listed securities, we remain steadfast in our commitment to enable retail investors with additional insight by providing each and every investor with the ability to make better-informed decisions.
Beyond these educational resources and access to critical market data, the Nasdaq Foundation seeks to reimagine investor engagement by equipping under-represented communities with the financial knowledge to share in the wealth that markets create, developing strategic partnerships and supporting other organizations through its Quarterly Grant Program.
Shortly after Nasdaq relaunched the Foundation in 2020, it began its efforts by commissioning a report by the Aspen Institute and Commonwealth that examined the importance of increasing participation in capital markets for all Americans, especially women of color. The report, A Framework for Inclusive Investing: Driving Stock Market Participation to Close the Wealth Gap for Women of Color, identified four distinct but interrelated barriers to opening up capital markets for women of color:
- A lack of resources to invest
- An unmet appetite for basic knowledge to understand investing
- Products and processes that fail to facilitate investment
- And seeing themselves – or being seen by family, peers, and society – as investors
The first phase of this initiative began with the InvestHER Power Series. In partnership with digitalundivided, this series strives to empower first-time investors and unlock greater market participation. Similarly, My Money My Future and Black & Brown Founders are seeking to increase access to investor education in underserved communities through the THRIVE Initiative. Looking ahead, fellow New Investor Initiative partner, Commonwealth, will be studying a cohort of new investors in order to create an inclusive investing toolkit.
Financial literacy is central to making today's markets work for more people's benefit. At Nasdaq, we are committed to making investing more inclusive, providing investors of every age and background the resources needed to participate and thrive in the capital markets. While we have established various avenues of educational resources, supported partner organizations and increased access to market data, we know there is still much to do to bring financial literacy to every community we serve — and we won’t stop until we do so.