Securities Brokers NAICS 523150

May 16, 2025 - Investors More Bearish on Stock Market

• Most American investors have a gloomy outlook on the US stock market, with low expectations for the next three months, according to a survey by Charles Schwab. The investment bank’s quarterly report on trader/client sentiment shows 57% have a bearish outlook in Q2, up from 32% in Q1, due to market volatility and a rocky political environment. Investors won’t remain idle, though, and plan to navigate an up and down market. About 61% of investors plan to buy stocks when things dip and almost half of respondents are adding money to their portfolios and plan to invest in individual stocks. The risk of a recession jumped 30 points to 63% and investors expect high inflation throughout the year. Investors feel most bullish about the energy and utilities industries (cited by about half of those surveyed) and are more bearish on real estate holdings and discretionary consumer spending.
• Investment banker and security broker wages for nonsupervisory employees increased 2.7% year over year in January 2025 (per the US Bureau of Labor Statistics) as bonus packages became more generous than they were in 2022-23. Bonus pools are critical compensation elements to investment bankers and account for a significant portion of total compensation. The overall bonus pool spiked to $42.7 billion in 2021 (per the New York State Comptroller) before it course-corrected to more standard levels. The bonus pool was estimated to grow 7% in 2024 to around $36.1 billion. A recent survey of investment banker pay by recruiter Prospect Park Partners found junior associates with a starting salary of $110K can earn up to 50% of base salary in bonuses. At the VP and up level, bankers can earn bonuses equal to or higher than their base salary, with the average bonus being $1.7 million.

• Securities and Exchange Commission (SEC) Chair Gary Gensler warned investment advisors and broker-dealers in early September about “AI washing,” a term used to describe the making of over-inflated claims about the use of AI. “Companies should ask themselves some basic questions, such as if we're discussing artificial intelligence in our earnings calls or having extensive discussions with our board of directors, maybe this information is potentially material to our business and to investors,” Gensler said. “Investment advisors, broker-dealers also should not mislead the public by saying they're using AI when they're not, nor say that they're using it in a particular way and not do so.” AI washing could violate securities laws, he noted. The September message follows at least three cases that the SEC has filed this year against companies alleged to have engaged in AI washing, including two against financial services companies. The SEC settled charges in March against two investment advisors – Delphia and Global Predictions – for $400,000. Those firms allegedly mischaracterized or made untrue statements to clients about their use of AI.
• The US Securities and Exchange Commission (SEC) issued a notice of proposed rulemaking that would require SEC-regulated investment advisers, investment companies, and broker dealers to notify individuals affected by certain types of data breaches, along with other related requirements. The SEC currently does not require covered entities to notify affected individuals in the event of a data breach. Covered entities generally respond to data breaches according to applicable state data breach notification laws. The proposal would also require covered institutions to develop, implement, and maintain written policies and procedures for an incident response program that is reasonably designed to detect, respond to, and recover from unauthorized access to or use of customer information. A response program would include procedures to assess the nature and scope of any incident and to take appropriate steps to contain and control the incident to prevent further unauthorized access or use.