What You Need to Know
- Accounts grew as stocks continued to recover from the March 2020 selloff and consumer confidence returned to pre-pandemic levels, the report found.
- Trading volumes mirrored those of a year ago as participants encountered familiar volatility with the rise of the delta variant.
- Forty-eight percent of Generation X participants' accounts were advised, compared with 36% of baby boomers’ and 13% of millennials'.
Retirement plan participant investment account balances within self-directed brokerage accounts averaged $348,183 across all participant accounts at the end of the second quarter, up 22% year over year and up 4.3% from the first quarter, Charles Schwab reported Tuesday.
SDBA participants can use their brokerage accounts to invest retirement savings in individual stocks and bonds, exchange-traded funds, mutual funds and other securities that are not part of their retirement plan’s core investment offerings.
According to the report, trading volumes were in line with those of one year ago at an average of 14 trades per account, as participants encountered familiar pandemic volatility with the rise of the delta variant of COVID-19.
Though the volatility was anxiety-inducing, participants’ accounts grew year over year as stocks continued to recover from the March 2020 selloff and consumer confidence surged back to pre-pandemic levels.
The report said 37% of participant assets were held in equities, 30% in mutual funds, 20% in ETFs, 12% in cash and 1% in fixed income.
Schwab based its report on data it collected from some 174,000 retirement plan participants who have balances between $5,000 and $10 million in their Schwab Personal Choice Retirement Account.
Schwab’s second-quarter data showed that large-cap funds accounted for about 34% of mutual fund allocations, followed by 19% to taxable bond funds and 16% to international funds.