Balances in Advised Self-Directed Brokerage Accounts Nearly Double Those of Non-Advised Accounts, Says New Schwab Report
August 21 2019 - 09:00AM
Business Wire
According to Charles Schwab’s latest SDBA Indicators Report™, an
industry-leading benchmark on retirement plan participant
investment activity within approximately 142,000 self-directed
brokerage accounts (SDBAs), only 20% of SBDA participants worked
with an advisor; however, those who did had an average balance of
$448,515 – nearly twice as much as the $234,673 held by non-advised
participants.
SDBAs are brokerage accounts within retirement plans, including
401(k)s and other types of retirement plans, which participants can
use to invest in stocks, bonds, exchange-traded funds, mutual funds
and other securities that are not part of the plan's core
investment offerings.
Allocation Trends
In non-advised accounts, participants allocated one-third of
their portfolios to equities, with Apple and Amazon representing
nearly 17% of their equity allocation. Mutual funds were next,
representing approximately 32% of participant assets, followed by
cash, ETFs and fixed income.
In advised accounts, mutual funds remained the investment
vehicle of choice, representing approximately 50% of participant
assets. ETFs were the second-largest allocation, followed by
equities, cash and fixed income.
Participants’ Market Value
Allocation in 2Q19
Mutual Funds
Equities
ETFs
Fixed Income
Cash
Advised
50%
19%
23%
4%
4%
Non-Advised
32%
33%
15%
3%
17%
Both advised and non-advised participants held Apple and Amazon
as their top stocks; however, non-advised participants were much
more concentrated in these positions. Additionally, non-advised
participants allocated more of their holdings to growth stocks,
whereas those who worked with advisors were invested in more
value-oriented companies.
Advised Accounts
% Equity
Non-Advised Accounts
% Equity
Assets
Assets
APPLE INC
5.88
APPLE INC
9.54
AMAZON.COM INC
3.75
AMAZON.COM INC
7.13
MICROSOFT CORP
3.00
BERKSHIRE HATHAWAY
2.51
BERKSHIRE HATHAWAY
2.74
MICROSOFT CORP
2.15
VISA INC
2.09
FACEBOOK
2.13
J P MORGAN CHASE & CO
1.36
NETFLIX INC
1.64
JOHNSON & JOHNSON
1.32
BANK OF AMERICA CORP
1.17
CISCO SYSTEMS INC
1.26
NVIDIA CORP
1.16
CHEVRON CORP
1.14
ALPHABET INC
1.15
ALPHABET INC
1.10
ALIBABA GROUP HOLDING
1.14
Other Highlights
- The average SDBA account balance for all participants in the
second quarter of 2019 was $276,547, up 3.3% from the first quarter
of 2019 and up 12.3% from the fourth quarter of 2018;
- Advised accounts averaged 9.8 trades in the second quarter,
compared to 5.7 trades by non-advised participants. Overall trading
volume was very similar to last quarter and last year;
- Gen X represented the majority of advised accounts (43.9%),
followed by Baby Boomers (43%) and Millennials (9.7%).
About the SDBA Indicators Report™
The SDBA Indicators Report includes data collected from
approximately 142,000 retirement plan participants who currently
have balances between $5,000 and $10 million in their Schwab
Personal Choice Retirement Account®. Data is extracted quarterly on
all accounts that are open as of quarter-end and meet the balance
criteria.
The SDBA Indicators Report tracks a wide variety of investment
activity and profile information on participants with a Schwab
Personal Choice Retirement Account (PCRA), ranging from asset
allocation trends and asset flow in various equity, exchange-traded
fund and mutual fund categories, to age trends and trading
activity. The SDBA Indicators Report™ provides insight into PCRA
users’ perceptions of the markets and the investment decisions they
make.
Data contained in this quarterly report is from the second
quarter of 2019, and can be found at www.schwab.com/sdbaindicators,
along with prior reports.
About Charles Schwab
At Charles Schwab, we believe in the power of investing to help
individuals create a better tomorrow. We have a history of
challenging the status quo in our industry, innovating in ways that
benefit investors and the advisors and employers who serve them,
and championing our clients’ goals with passion and integrity.
More information is available at www.aboutschwab.com. Follow us
on Twitter, Facebook, YouTube, and LinkedIn.
Brokerage Products: Not FDIC‐Insured •
No Bank Guarantee • May Lose Value
Disclosures
The securities shown are for informational purposes only and are
not a recommendation to transact in any security.
Through its operating subsidiaries, The Charles Schwab
Corporation (NYSE: SCHW) provides a full range of securities
brokerage, banking, money management and financial advisory
services to individual investors and independent investment
advisors. Its broker-dealer subsidiary, Charles Schwab & Co.,
Inc. (member SIPC, www.sipc.org), and affiliates offer a complete
range of investment services and products including an extensive
selection of mutual funds; financial planning and investment
advice; retirement plan and equity compensation plan services;
compliance and trade monitoring solutions; referrals to independent
fee-based investment advisors; and custodial, operational and
trading support for independent, fee-based investment advisors
through Schwab Advisor Services. Its banking subsidiary, Charles
Schwab Bank (member FDIC and an Equal Housing Lender), provides
banking and lending services and products. More information is
available at www.schwab.com and www.aboutschwab.com.
This report is for informational purposes only and is not a
solicitation, or a recommendation that any particular investor
should purchase or sell any particular security.
Schwab Personal Choice Retirement Account® (PCRA) is offered
through Charles Schwab & Co., Inc. (member SIPC), the
registered broker/dealer, which also provides other brokerage and
custody services to its customers.
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version on businesswire.com: https://www.businesswire.com/news/home/20190821005142/en/
Mike Peterson Charles Schwab 330-908-4334
mike.peterson@schwab.com
Jade Faugno Intermarket Communications 212-754-5425
jfaugno@intermarket.com
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