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.
Canadian stocks are on a roll in 2025 as the country prepares to name a new Prime Minister.
Two C-level leaders reveal the new time-saving tools they've implemented and what advisors are doing with their newly freed-up hours.
The RIA led by Merrill Lynch veteran John Thiel is helping its advisors take part in the growing trend toward fee-based annuities.
Driven by robust transaction activity amid market turbulence and increased focus on billion-dollar plus targets, Echelon Partners expects another all-time high in 2025.
The looming threat of federal funding cuts to state and local governments has lawmakers weighing a levy that was phased out in 1981.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
