Investors under advisement who participate in Self-Directed Brokerage Accounts (SBDA) within their workplace retirement plans maintain almost double the balance of the non-advised and engage in nearly twice as many trades, according to new data.
The Charles Schwab SDBA Indicators Report found that the average participant balance for advised accounts is $436,593, up from $402,866 last quarter, compared with $227,334 for non-advised IRA and 401(k) self-directed accounts.
That’s because there is a multitude of benefits to working with an advisor that can result in a higher balance, according to Mike Peterson, director of corporate public relations at Schwab in Ohio.
“Someone who has an advised account versus a non-advised account will likely have more diversification in their holdings and advisors are likely to frequently rebalance clients’ portfolios,” he said.
Overall, trading volume remains similar to last quarter and to last year, but those with advised accounts showed a total of 10.3 average trades compared with only 5.6 for non-advised accounts.
The report surveys some 137,000 retirement plan participants who currently have balances between $5,000 and $10 million in their Schwab Personal Choice Retirement Account through March 31, according to Charles Schwab.
The study further found 41% of participants are Gen Xers, 40% are baby boomers and 12% are millennials. Boomers and Gen Xers made up 44% and 43.2% of advised account holders, respectively; while millennials made up 9.2%. When it comes to mobile trades, millennials and Gen Xers lead at 21%, compared with 14% for their older counterparts.