Inventory and making it easier to go public are two major concerns for the capital markets and Nasdaq, said Adena Friedman, CEO of the technology exchange, during the Envestnet Summit in Austin, Texas. In a discussion, Friedman noted that the advance of technology certainly aids the financial services business in general and financial advisors in particular.
“The most pressing problem for the capital markets is getting companies to go public,” Friedman said, nothing that in 2018, Nasdaq had 106 initial public offerings of the roughly 225 launched. However, in the 1980s and 1990s, she noted, there were about 500 IPOs launched a year on average. Keeping more companies private longer has stacked the deck against the average investor, who “doesn’t benefit from the stock’s growth, and this will increase, over time, wealth disparity.”
Also, Friedman says, shrinking inventory increases the problem. The Securities and Exchange Commission is aware of this and is working to ease the hurdles for companies to go public. “Proxy reform is critical,” she added.
“The internet superpowered and democratized the capital markets,” she said, adding that the cloud is the next wave. “Major technology now is machine intelligence,” she said, “which can change every element on how we provide intelligence to customers and make sure markets stay safe.”
Few industries exist where data has led the way, she said, but data has been crucial to financial services. She also believes that in the next 10 years, investors will learn to use that data and technology to make smarter decisions.
And this doesn’t mean making the advisory business smaller; in fact, “the entire wealth management industry, and role of financial advisors is expanding in a major way … millennials may try robo-advisors but want advisors to ‘help them through their life.’”