Retirement-plan participants who hold self-directed brokerage accounts with Charles Schwab are seeing balances grow again this year.
They ended the first quarter with an average account balance of $328,239, up nearly 10% year-over-year and up 5.8% from the fourth quarter of 2023, according to the firm’s SDBA Indicators Report. Self-directed brokerage accounts can be found in 401(k)s and other types of employer-sponsored retirement plans.
Advised self-directed brokerage accounts (SDBAs) held an average $526,997 at the end of Q1 — nearly twice as much as the average $286,421 balance in non-advised accounts. Gen X had the most advised accounts (52%), followed by baby boomers (25%) and millennials (19%).
Plan participants can use self-directed brokerage accounts to invest retirement savings in individual stocks and bonds, and in ETFs, mutual funds and other securities that aren’t part of the core investments offered in their workplace retirement plans.
According to the Schwab report, asset allocations in its self-directed brokerage accounts in the first quarter of 2024 were similar to the fourth quarter of 2023.
Equities remained the largest holding, accounting for more than one-third (34.1%) of total assets. The largest equity-sector holding was information technology at 34.6%. The top equity holdings remained Apple (9.7%), Nvidia (8.2%), Amazon (5.2%), Tesla, (4.9%) and Microsoft (4.1%).
Mutual funds remained the second largest holding at 28.4%. The largest allocation here went to large-cap stock funds (34.2%), followed by money market funds (15%) and taxable bond funds (14.4%).
ETFs held 24.4% of participant assets. Investors continued to allocate the most ETF dollars to U.S. equity (51.7%), followed by U.S. fixed income (12.8%), international equity (11.9%) and sector (9.5%) ETFs.
Rounding out assets allocation at the end of the first quarter were cash and equivalents (8.1%) and fixed income (5.1%).
On average, participants held 11.8 positions in their SDBAs at the end of first quarter. That’s the same as the fourth quarter of 2023 and slightly lower than the first quarter of 2023.
The SDBA Indicators Report, an industry benchmark, includes data from approximately 286,000 retirement plan participants who have balances between $5,000 and $10 million in their Schwab Personal Choice Retirement Accounts.
