The continued rally in equity markets helped boost balances in self-directed 401(k) accounts in the second quarter of 2024, according to a leading indicator from Charles Schwab.
The firm’s SDBA Indicators Report includes data collected from approximately 290,000 retirement plan participants who currently have balances between $5,000 and $10 million in their Schwab Personal Choice Retirement Account.
For Q2 2024, the average balance was up by 5.7% year-over-year to $335,008. This was a 2.1% increase compared to the first quarter of 2024. Advised accounts saw a far higher balance ($528,287) than non-advised accounts ($293,455) and Boomers had the highest SDBA balances at an average of $548,353, followed by Gen X at $329,089 and Millennials at $115,867.
Gen X held the most advised accounts (52%) followed by Boomers (24%), and Millennials (22%). Gen X also made up around 47% of all SDBA participants, followed by Boomers (26%) and Millennials (25%).
Equities accounted for 34.9% of holdings, led by Information Technology (37.9%) including Nvidia (11.1%), Apple (10.7%), Amazon (5.2%), Tesla (5.1%), and Microsoft (4.1%).
The second largest holding was mutual funds (28.1%) driven by large-cap stock funds (34.2%), money market funds (16.2%), and taxable bond funds (14.2%).
ETFs were next at 24.7% with more than half of these holdings allocated to US equity (51.8%), well ahead of fixed income (12.7%), international equity (11.9%), and sector (9.3%) ETFs.
Meanwhile, cash & equivalents held 7.4% of participant assets while 5.0% of assets were held in fixed income.
The average number of positions held by SDBA participants at the end of the second quarter was 11.8, slightly down year-over-year but the same as in the first quarter of 2024. Trading volumes averaged 12 trades per account, similar to the first quarter of 2024 and slightly higher than the second quarter of 2023.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
