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Differences Between Retail Investment Agencies Vs. Institutional Investors

If you know that you are interested in investing, you could be looking into different investment agencies that you can potentially work with. For example, you might have checked out some of the institutional investment agencies that are out there. You might have also heard of retail investment agencies, and you could be wondering about the differences between the two different types of investment agencies. These are some of the major differences that you should know about. By understanding these differences, it might make it a little bit easier for you to choose the right agency.

Retail Investors Are Often Non-Professionals

Of course, if you work with a big institutional investment firm, you might find that the company is made up of financial professionals. However, retail investors are typically individuals who are not actually financial professionals at all. Instead, retail investors are typically individuals who are investing for their own personal reasons.

Transactions Are Often Smaller

Next, you should know that the investment transactions that go on within institutional agencies are typically quite large. Retail investors, on the other hand, typically deal with much smaller transactions. Of course, the size of the transactions varies from investor to investor and between different investment types. However, the average transaction size is often significantly smaller.

Fees Are Sometimes Higher

One downside that some retail investors have to deal with is the fact that they often have to pay more in fees. This happens because of their smaller trades. However, some retail investors do try options like using no-fee trading websites to save a little bit of money on these fees.

There Are Many Different Types of Retail Investing

Many people don't realize that there are a number of different types of retail investing that can take place. Retirement accounts are considered to be retail investing accounts, for example. Many of the online trading accounts and types that are out there are forms of retail trading, too. Therefore, if you have ever been involved in any type of trading for personal purposes, there is a chance that you might have participated in a type of retail investing yourself.

There Are Still Laws in Place

Lastly, be aware that there are still laws in place that have to be followed when a person is involved in retail investing. Many people aren't aware of this and think that the laws and regulations primarily apply to institutional investors, but this simply is not the case.