In 1983, a dentist in Michigan executed the world’s first online trade from his home computer, sending an order through Trade Plus—a precursor to E*Trade. At a time when individual investing meant calling a broker during business hours and relying on their recommendations, this simple transaction marked a radical departure. Overnight, technology shifted the balance of power from institutions to individuals, permanently reshaping how the world would interact with markets.
Merrill Lynch’s chairman Daniel Tully captured the establishment’s reaction: “The do-it-yourself model of investing, centered on Internet trading, should be regarded as a serious threat to Americans’ financial lives.” Some of the skepticism proved well-founded. But by and large, people embraced these new tools and transformed both the market and their financial futures.
Within a decade, millions would be researching, managing, and executing trades on their own terms. Today, 43.1% of U.S. households’ financial assets are tied to the stock market—up from just 12.3% in 1983—a transformation that would have been unimaginable when that Michigan dentist placed his pioneering trade.
As CEO of E*Trade at the time, I watched the forces that drove this revolution firsthand. Now, I see the same factors converging in private markets. (Disclaimer: I currently lead Yieldstreet, which among other things helps retail investors access private markets.) We’ve already proven that technology can democratize closed markets. The question is whether we’ll design this next wave of access—to private markets—with a greater commitment to serving and protecting the average investor.
What’s driving the trend?
First, low-cost, accessible investment vehicles are emerging. Just as ETFs and index funds dramatically lowered barriers to stock market participation, new fractional ownership models and specialized funds are making private assets available at lower minimums.
Second, technological infrastructure is catching up. As Larry Fink noted in his annual letter, “With clearer, more timely data, it becomes possible to index private markets just like we do now with the S&P 500.” BlackRock’s acquisition of Preqin—a provider of private markets data that tracks over 190,000 funds and 60,000 managers—signals a push for the same transparency in private markets that investors expect in public ones.
Third, investor education is evolving alongside access. When E*Trade and Schwab opened the doors to trading, they created a massive knowledge gap. The Motley Fool, Investopedia, and countless creators emerged to fill it. Today, asset managers like Hamilton Lane and Apollo are building robust educational infrastructure for private markets, and I expect a similar explosion of independent educators, YouTube channels, and new media platforms dedicated to demystifying these new assets.
Fourth and finally, marketing is normalizing what was once exclusive. In the 2000s, E*Trade’s Super Bowl baby became a cultural touchstone and a Trojan horse for a broader message: Stocks and bonds were no longer reserved for Wall Street. That same democratizing message is beginning to reshape how we think about private markets.
However, entrenched interests are fighting this change harder than they fought electronic trading. The same industry that warned electronic trading would harm small investors now claims private markets are too complex for ordinary people. Meanwhile, the accredited investor rules—based on wealth, rather than investing knowledge—arbitrarily exclude 88% of Americans from these types of investments.
Learning from the past
The rise of electronic trading expanded opportunity but also created new risks. The dot-com bubble saw retail investors lose trillions as platforms prioritized volume over outcomes, gamifying investing rather than educating investors. If private markets open without proper guardrails, we risk repeating these mistakes at an even greater scale.
The solution starts with purpose-built products. Instead of retrofitting institutional vehicles with high fees and lock-ups, we need investments designed for individuals. Imagine target-date funds incorporating private assets for savers with long-time horizons. Or technology that makes private market performance as transparent as checking your 401(k).
This transformation is overdue. While retail investors have gained easy access to public stocks, they’ve been locked out of private markets—where most value creation in the economy occurs. The companies staying private longer, the real estate developments reshaping cities, the innovation happening in venture-backed startups—all of it has been reserved for institutions and the ultra-wealthy.
That’s finally changing. This time, however, we have the benefit of hindsight—and the responsibility to use it.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
Read more:
- Opinion | It’s time to open the 401(k) to private markets
- Private markets are a hot new sector for retail investors. What to know before you dive in
