- Self-directed assets increase to 23% and the share of
investors without a college degree exceeds 50%
- ETF usage rose to 47% from 31% in 2018 and is likely to
exceed 50% by 2025
- The count of Millennial investors is on a path to overtake
that of Gen-X investors, Millennial count increases by 9 percentage
points since 2018
- Female investors have higher median assets than male
investors at $52,105 in 2023 compared
to men's $50,271
NEW
YORK, May 22, 2024 /PRNewswire/ -- The
newest edition of the annual U.S. Investor Study, launched today
from global Fintech leader Broadridge Financial Solutions,
Inc. (NYSE: BR), provides critical insight into U.S. retail
investor habits and enables asset managers, advisors and investors
to deepen their understanding of the national investment landscape.
This year's Study reveals key trends such as Gen-Z, Millennial and
Gen-X investors steadily increasing their share of assets while
assets held by Boomers and the Silent Generation continue to
decline, the rising popularity of self-directed investing across
generations and Americans' slow but steady breakup with mutual
funds as allocations to ETFs and U.S. equities rise.
Broadridge's U.S. Investor Study is the single widest and
deepest analysis of American investor behavior, drawing on the
activities of more than 40 million individual U.S. investors across
mutual funds, ETFs, and individual equities. The unparalleled
breadth of the Study provides a powerful lens for financial
advisors, fund managers, and policy professionals and delivers
valuable insight into the key trends most impacting the investment
industry.
"The scope of this report demonstrates the dramatic changes we
are seeing in the investment landscape as investor activity and
sentiment continue to undergo tectonic shifts," said Dan Cwenar, Head of Broadridge Data and
Analytics. "The rise of younger investors and self-directed
investing has led to asset managers, broker-dealers and advisors
evolving their practices to better serve a more diverse class of
investors across generations. Against this backdrop, it's critical
to have a complete understanding of investors' decision-making and
appetite for different investments to better inform portfolio
customization, customer service and prospecting. Our Study provides
key insight into investor habits and sales channels, with the goal
of delivering valuable data to inform investment product strategy
and investment advice in the year ahead."
The monumental rise of self-directed investing as younger
investors seize assets within the channel
Since 2018, there has been a significant surge in the number of
investors adopting self-directed investing (online discount
investing), with 31% of all investors allocating assets to online
discount brokerage platforms, about one-third of whom also have an
advisory relationship. Additionally, investors are intentionally
increasing their asset ownership via online discount brokerages (up
from 14% in 2018 to 23% in 2023).
This contradicts the widely assumed belief that self-directed
investing is just for the young and less affluent. In fact,
Broadridge's data shows that High-Net-Worth investors lean more
heavily on self-directed investing compared to their Mass Market
and Mass Affluent cohorts, with nearly 25% of assets in the
self-directed channel.
While all generations are leveraging self-directed investing,
Gen-Z, Millennial, and Gen-X investors are steadily increasing
their assets within the channel, collectively gaining 9 percentage
points to 36% at the expense of the Silent Generation and
Boomers.
Alongside the rise of self-directed investing and the broader
trend of the democratization of investing, this year's Study
further exemplifies that younger, less experienced investors are
capturing their own piece of the pie. The count of Millennial
investors is on a path to overtake the count of their Gen-X
predecessors, with the count of Millennials up by 9 percentage
points since 2018, jumping from 13% in 2018 to 22% in 2023. In
contrast, the count of Boomers saw a 9 percentage point
decline.
The average number of investments held across generations
continues to increase, with Millennials growing the fastest over a
five-year period, increasing from six investments in 2018 to 10 in
2023.
Americans fall out of love with mutual funds as equity
investments double
2023 marked the first time that mutual fund assets dropped below
equity assets within individual investors' portfolios, with the
share of investors owning mutual funds declining from 72% in 2018
to 62% in 2023. Further, the average number of equity investments
held by investors doubled from 4 in 2018 to 8 in 2023.
Boomers had the highest allocation to mutual funds in 2023
(39%), compared to younger cohorts who are seeking alternative
options, such as ETFs and U.S. equities. Asset ownership in
equities has risen among the younger generation of investors since
2018, with Gen-Z doubling from 0.2% to 0.4%, Millennials more than
doubling from 2% to 6% and Gen-X jumping from 16% to 24%.
Additional key findings:
- Men make up more than half of investors (51%) and controlled
55% of assets in 2023, up slightly from 54% in 2018. The average
male investor is three years younger than the average female
investor and perhaps owing to their higher median age, female
investors have slightly higher median assets ($52,105 in 2023 compared to men's $50,271).
- The democratization of investing has been an overarching trend
in asset management in the last decade, and the jump in the use of
online discount brokers during the pandemic accelerated the shift.
The share of investors without a college degree exceeded 50% for
the first time in 2022, reaching 51% in 2023. However, investors
who only hold a high school degree still fall significantly behind
those with higher levels of education in terms of median assets.
Individuals without a college degree held $28,332 in assets in 2023, compared to
$73,044 for those who completed
college and $148,399 for those who
completed graduate school.
- The online discount channel has steadily won a larger share of
assets over the last five years (jumping from 14% in 2018 to 23% in
2023) and is on a trajectory to become the second largest
distribution channel segment. The Broker-Dealer channel retains the
top spot, although its market share has dropped 7% since 2018.
Broadridge's U.S. Investor Study (75+ pages, 100+ exhibits) 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. Firms use the
critical perspective to make better, more informed strategic
decisions about their businesses.
To view a summary of 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, 2022 and 2023.
About Broadridge
Broadridge Financial Solutions (NYSE:
BR), a global Fintech leader with over $6
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
$10 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, 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.