Experts Debate Retail Investor Sophistication Levels

Financial professionals disagree on whether modern retail investors are better equipped than those from 30 years ago.

Updated on Oct. 24, 2026 in Investing

Experts Debate Retail Investor Sophistication Levels

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Victor Haghani and Valerie Grimba appeared on CNBC to discuss the evolving capabilities of retail investors in today's market. Haghani argues that retail participants have fallen behind, while Grimba contends that expanded ETF options have created significant new benefits.

Why it matters

The debate highlights a growing divide in how market participants approach wealth management compared to institutional firms. Understanding these differing perspectives helps individual investors evaluate their own strategies against the backdrop of modern financial technology.

Institutional firms now commit $1 billion in annual technology spending to maintain their market edge. Conversely, many thematic retail funds limit their exposure to only 10 to 15 stocks.

The players

Victor Haghani

He is the founder and chief investment officer of Elm Wealth and was formerly a founding partner at Long-Term Capital Management.

Valerie Grimba

She serves as the director of global ETF strategy at RBC Capital Markets.

The details

Victor Haghani suggests that retail investors remain prone to human biases like extrapolation bias, making them less sophisticated than investors were 30 years ago. In contrast, Valerie Grimba highlights how the broader availability of exchange-traded funds has improved the tools accessible to the public, despite the common practice of using derivative-based products to generate income.

1996 served as the baseline year for the comparison of retail investor sophistication.
Victor Haghani and Valerie Grimba appeared on CNBC in October 2026.

Market Dynamics

This debate over retail capability updates the performance benchmarks established by the 1996 retail investor market. It marks a departure from historical norms by questioning whether increased access to sophisticated products actually translates to improved individual decision-making.

Retail investors should consider how their reliance on thematic funds or derivative products impacts their long-term portfolio stability. Assessing whether these tools provide genuine diversification or merely increase risk is essential for managing personal savings in the current environment.

The takeaway

The gap between institutional resources and individual investor tools continues to widen as financial technology spending accelerates. Investors should focus on building strategies that minimize common human biases rather than chasing complex products that may be difficult to manage.