SCHW Charles Schwab Corporation

Key Highlights:

• More than 60% of Americans feel they are in a better position to achieve their financial goals than the generations that came before them.
• Nearly three in five Americans are investing today.
• Investing participation is higher among older generations, but younger generations are beginning to invest sooner.
• More than a quarter of Gen Z were taught about investing in school, significantly more than older generations.
• Just 36% of Americans have a written financial plan.

More than 60% of Americans feel they are in a better position to achieve their financial goals than the generations that came before them, according to Schwab’s eighth annual Modern Wealth Survey, an examination of how Americans think about saving, spending, investing and wealth. This optimism is most pronounced among Boomers, with 66% believing they are more or as likely as older generations to reach their goals. However, every generation surveyed showed a similar level of confidence when asked to compare themselves to previous generations—Gen X (63%), Millennials (62%) and Gen Z (60%).

One factor likely driving this positivity is a surge in the number of Americans investing in the stock market. Schwab’s survey shows that almost three in five Americans (58%) are investing today, in line with recent Federal Reserve data that shows the same proportion of American households that own stocks—either in mutual funds, retirement accounts, or as individual shares. The Federal Reserve data is up from 53% in 2019 and the highest on record.

In fact, when asked why they are in better financial shape than previous generations, the Schwab survey indicates that Americans believe they have more ways to build wealth (50%), increased accessibility to investing (46%) and additional investment options available to them (46%).

Among Gen Z in particular, the top reason for increased financial confidence is improved access to investing. This generation, which starts with those born in the late 1990s, began saving and investing when they turned 19 years old on average, nearly half the age of when Boomers started investing (35), according to Schwab’s data.

 

All Americans

Gen Z

Millennials

Gen X

Boomers

Investing today

58%

45%

54%

58%

63%

Age started investing

30 

19

25

32

35

Reasons Americans feel they’re more likely to reach their

financial goals than previous generations

 

All Americans

Gen Z

Millennials

Gen X

Boomers

There are more ways to build wealth now

50%

40%

44%

45%

68%

Investing is more accessible now

46%

42%

40%

43%

58%

There are more investment options now

46%

41%

39%

41%

64%

There is better financial technology now

45%

38%

44%

43%

56%

Financial education is more available now

43%

31%

41%

48%

51%

When comparing themselves to their parents at their age, more than half of all Americans surveyed believe that they are doing a better job at investing (51%), and they also feel they’re living their desired lifestyle more than their parents did at their age (52%).

“There has never been a better time to be an investor, and it’s a very positive sign to see that more Americans than ever before are engaged with their personal finances and taking steps to build long-term wealth, in particular younger generations who are getting started with saving and investing earlier in their lives,” said Jonathan Craig, Head of Investor Services at Charles Schwab. “We of course saw the number of Americans investing go up during the pandemic, but there are a lot of factors driving this trend that were in place before that and continue to drive engagement today. Industry changes like lower costs and minimums to invest and get advice, broader access to sophisticated platforms and tools, a proliferation of investing information such as research and educational content, and significant product innovations have all made investing more accessible than ever before. Creating access for more people to become investors was Schwab’s core mission when our firm started more than 50 years ago, and it’s still at the heart of everything we do today.”

Investing Information Age

Across all generations, nearly 70% of Americans are confident in their investment strategy, and the availability of financial advice and knowledge (51%) and the ability to easily research companies and investments (37%) are cited as the top reasons. Gen Z, who are the most confident of the generations (71%), say that learning about investing at an early age is the biggest reason for their confidence, and more than a quarter report that they were taught about investing in school, significantly more than older generations. In fact, roughly half of all those who are not confident in their investment strategy say that not being taught about investments at a young age by parents or family or not being taught about investments in school are their top reasons for lack of investing confidence.

Reasons Americans are confident in their investment strategy

All Americans

Gen Z

Millennials

Gen X

Boomers

Financial advice and knowledge are readily available

51%

38%

46%

56%

55%

It is easy to access research about companies and investments

37%

35%

34%

37%

39%

It is easy to access investments

33%

34%

35%

28%

35%

I learned about investing at a young age

27%

43%

31%

26%

18%

I was taught about investments in school

16%

28%

19%

12%

9%

In addition to taking advantage of more widely available investment advice, educational resources, and investing tools, American investors today, particularly younger ones, are also exploring a wider range of investing strategies. Though buy and hold (56%) and growth investing (53%) are the most common approaches, Schwab’s survey shows Americans are also integrating more recent innovations in the investing space such as fractional share investing (37%), direct indexing (32%), socially responsible investing (31%), automated or robo-advisor investing (28%), and thematic investing (25%) into their strategies.

“Investing is becoming a passion for an increasing number of Americans—they are more engaged than ever with their investments and are taking advantage of all the information and knowledge at their fingertips,” said Rob Williams, CFP®, Managing Director of Financial Planning at Charles Schwab. “The result of this engagement and access to investing education and resources is a more sophisticated, more knowledgeable, and most importantly, more financially confident population of American investors.”

Investing strategies Americans currently implement

All Americans

Gen Z

Millennials

Gen X

Boomers

Buy and hold

56%

57%

59%

48%

60%

Growth investing

53%

57%

56%

51%

49%

Fractional shares investing

37%

48%

48%

33%

25%

Direct indexing

32%

44%

42%

26%

23%

Socially responsible investing

31%

43%

45%

27%

17%

Robo-advisor investing

28%

40%

41%

25%

11%

Thematic investing

25%

41%

41%

20%

9%

The Planning Gap

When it comes to financial advice, Americans are more likely to engage with a professional financial advisor (59%) or family or friends (57%) than social media platforms (42%) according to Schwab’s survey.

In fact, most Americans don’t follow any social media influencers for financial advice (76%) and remain skeptical about social media's effectiveness in making it easier to manage their money. Nearly two-thirds feel that social media has had no impact on managing their investments, and less than a quarter (24%) feel it has made it easier. Most grade social media platforms the lowest relative to other sources of financial advice.

How Americans grade sources of financial advice

A/B

D/F

Professional financial advisor

76%

9%

Accountant

68%

13%

Investment firm

68%

12%

Family

44%

23%

Friends

35%

28%

Reddit

20%

54%

TikTok

17%

64%

Twitter/X

16%

65%

Despite increased access to investing, education and advice, those surveyed acknowledge that there’s more they can do, with fewer than one in five Americans (18%) overall saying they are currently on top of their finances. Nearly one-third (32%) feel they are on track to being more on top of their finances and another one-third (34%) feel they need to make changes in order to feel more in control.

One key area for improvement among Americans is financial planning. According to Schwab’s survey, only 36% of Americans have a written financial plan. Among those who do, three in four say it makes them feel more in control of their finances and nearly all (96%) say they feel confident that they will reach their financial goals.

Among those who don’t have a plan, most say it’s because they don’t have enough money (43%), it’s too complicated (25%) or they don’t have enough time (21%).

“Investing and financial planning are more accessible and more affordable today than ever before, and while we see that Americans are making great strides with their personal finances overall, there is still room for improvement when it comes to more formalized financial planning,” said Williams. “Once clients start the process, they realize a financial plan isn’t just a document to file away. Whether you get started with a do-it-yourself digital financial plan or in-depth conversation with a planning professional, financial plans today include interactive digital planning tools to help monitor progress and understand how changes in your life goals or circumstances can impact your plans.”

About the Modern Wealth Survey

The online survey was conducted by Logica Research from March 4, 2024, to March 18, 2024, among a national sample of 1,000 Americans aged 21 to 75. An additional 200 Generation Z Americans completed the study. Quotas were set to balance the national sample on key demographic variables. Detailed results can be found here.

Disclosures

The information here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market, economic or geopolitical conditions.

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.

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial services, with 35.4 million active brokerage accounts, 5.3 million workplace plan participant accounts, 1.9 million banking accounts, and $8.85 trillion in client assets as of April 30, 2024. Through its operating subsidiaries, the company provides a full range of wealth management, securities brokerage, banking, asset management, custody, and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiaries, Charles Schwab & Co., Inc., TD Ameritrade, Inc., and TD Ameritrade Clearing, Inc., (members SIPC, https://www.sipc.org), and their 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; referrals to independent, fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its primary banking subsidiary, Charles Schwab Bank, SSB (member FDIC and an Equal Housing Lender), provides banking and lending services and products.

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Hibah Shariff Charles Schwab 415-667-0507 hibah.shariff@schwab.com