Balances in Advised Self-Directed Brokerage Accounts Nearly Double Those of Non-Advised Accounts, Says New Schwab Report

SAN FRANCISCO–(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.

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.

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.

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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Contacts

Mike Peterson

Charles Schwab

330-908-4334

mike.peterson@schwab.com

Jade Faugno

Intermarket Communications

212-754-5425

jfaugno@intermarket.com