- The growing number of first-time investors aren't all young,
new Gen X and Boomer generation investors also on the rise
- Advice still reigns, but self-directed investing via online
discount brokerages now hold more assets than any distribution
channel for investors age 55 and younger
- Even among 85-year-old investors, one of every five dollars is invested via self-directed online
discount brokerages, double from four years prior
- Younger women held a higher asset percentage in mutual funds
versus their male counterparts
- 14% drop in households that relied primarily on active
mutual funds compared to four years ago
NEW
YORK, May 15, 2023 /PRNewswire/ -- Three major
investor trends are playing out in the asset management industry,
according to the latest edition of the U.S. Investor Study from
global Fintech leader, Broadridge Financial Solutions (NYSE: BR).
The democratization of investing among all generations and
investible asset levels, the evolution of the next-generation
investor and the decline of active mutual funds are trends causing
an urgent need for the fund industry and wealth managers to adjust
their products and invest in new data, analytics and digital
capabilities in order to address these changes.
![Broadridge U.S. Investor Insights and Trends Broadridge U.S. Investor Insights and Trends](https://mma.prnewswire.com/media/2076331/BFS223917_Inv_Study_PR_051223_300dpi.jpg)
Broadridge's landmark U.S. Investor Study draws on detailed
analysis of billions of investor data points, made possible by its
critical role at the center of a communications network linking
thousands of brokers, tens of thousands of funds, and more than 100
million individual investors. As a result, the Study provides a
powerful lens for asset managers and financial advisors alike to
better understand the powerful trends driving the investment
landscape.
"Personalization is becoming one of the industry's most
disruptive trends that will have a profound impact on asset
management product and distribution strategies," said Dan Cwenar, head of Broadridge Data and
Analytics. "A deeper understanding of the end investor, especially
those self-directing their assets, creates an opportunity for
advisors to develop a more personalized experience for
investors."
The Democratization of Investing and the Rise of the Young
Investor
The investor population has changed significantly over the last
four years as new investors enter the market. There is a surge in
younger investors and an increase in Mass Market investor
households (<$100K in liquid
investable assets) across Millennial, Gen X, and Boomer
generations. The percentage of investor households with less than
$3.5K in investments rose among both
Millennials and Gen-X generations.
The Next Wave of Investors
Additionally, across age groups, more investors now use the
online discount channel compared to four years ago. The number of
investors using other channels remained relatively steady. A
significantly higher percentage of assets is now concentrated in
the online channel, while broker-dealer, RIA and wirehouse
declined. As investors of all ages, particularly younger investors,
flock to the online discount channel, it is increasingly important
for asset managers and advisors to find ways to engage with and
educate them.
A spotlight on 30-year-old investors reveals women held a higher
percentage of their invested assets in mutual funds, compared to
their male counterparts, who held a higher percentage of their
assets in ETFs and equities, though both have moved to a more
balanced mix among these products.
Narrowing differences among 30-year-olds by gender were also
seen in median AUM, reliance on the online channel and weighted
average fund risk score.
Decline in Active Mutual Funds, while ETFs and Equities
Rose
Assets for mutual funds, a product that was once the mainstay of
investor portfolios, declined across every generation and wealth
segment in the past four years, while ETFs and equities gained.
"Active Mutual Fund Investor" households, those with more than
one-half of their assets in active mutual funds, accounted for 44%
of households in 2022, a steep 14% decline from four years
ago. These households are more likely to be lower earners
(<$100k income) and heavy users of
the broker-dealer channel.
Broadridge's U.S. Investor Study is one of numerous
proprietary reports enabled by Broadridge's Data and Analytics
capabilities. Firms use Broadridge's data-driven insights to better
understand where their best opportunities are and how to capitalize
on them, and ensure they have their resources aligned against the
right clients and customers. The critical perspective firms gain
enable them to make better, more informed strategic decisions about
their businesses.
To view Broadridge's newest U.S. Investor Study,
click here.
Study Methodology
To create this study, Broadridge analyzed de-identified share
ownership data derived from Broadridge's proprietary business
processes consisting of tens of millions of retail investor
households and billions of data points to achieve a unique level of
insight into holdings invested through financial intermediaries
(broker-dealers, online, RIAs, wirehouses). Broadridge analyzed
exchange-traded funds (ETFs), closed-end funds, open-end mutual
funds and U.S. equities held in taxable accounts and IRAs for the
years ending 2018, 2019, 2020, 2021 and 2022.
About Broadridge
Broadridge Financial Solutions (NYSE: BR), a global Fintech
leader with more than $5 billion in
revenues, provides the critical infrastructure that powers
investing, corporate governance and communications to enable better
financial lives. We deliver technology-driven solutions that drive
business transformation for banks, broker-dealers, asset and wealth
managers and public companies. Broadridge's infrastructure serves
as a global communications hub enabling corporate governance by
linking thousands of public companies and mutual funds to tens of
millions of individual and institutional investors around the
world. Our technology and operations platforms underpin the daily
trading of more than U.S. $9 trillion
of equities, fixed income and other securities globally. A
certified Great Place to Work®, Broadridge is part of
the S&P 500® Index, employing over 14,000
associates in 21 countries.
For more information about us and what we can do for you, please
visit www.broadridge.com.
Media contact:
Matthew
Luongo
Prosek Partners
+1 646-818-9279
mluongo@prosek.com
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SOURCE Broadridge Financial Solutions, Inc.