Schwab Network’s Post

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It is time to spotlight Schwab's 2024 Modern Wealth Survey. Joining me for this, Jonathan Craig is here, head of investor services at Charles Schwab. Thank you so much for being with us. I thought it was very interesting to see how confident people are feeling in their financial goals and their investment. What stood out to you in this survey, Jonathan? Great. Well, thanks Nicole for having me. It is great to to be on the Schwab network and talk about our Modern Wealth survey. I think she mentioned it's our 8th year doing that. We talked to over 1000 Americans across wealth tiers and, and age in ages from 21 to 75. And it's really designed to understand how they're thinking about wealth, but also in particular saving and investing. And we did see a lot of confidence in this year's survey and a lot of engagement with personal finance. You know, a couple stats I'll share. Over 70% of Americans in the study feel confident. And they're investing strategy and over 60% felt like they're more likely to achieve their investment goals than the generations before them. So a lot of confidence across ages and and a lot of engagement with personal finance, which is great to see. And what was interesting within some of those numbers, about 60% feeling they're in a better position, I thought the generation to generation confidence was also a testament to the optimism and the tools that are available to folks. And that is seen to be within the survey, you know, ways to build wealth, accessibility to investing, investing options that are available. That's something that obviously Charles Schwab works so hard on with education. And having folks to speak with people when they call in. But tell me more about that because it's, it's not like yesteryear people are doing new things like short term trading. We used to just buy and hold. Yeah, it definitely is a very much a different time. I think across generations what we saw was a lot of commentary around accessibility. It's just it's never been easier to invest and and you know, whether it's with no commissions, no account fees, fractional trading be able being able to buy it with notional values, it really never has been easier. And then similarly as you mentioned, people are trading differently. It's no longer simply about stocks and bonds and mutual funds, but a lot more short term trading, a lot more trading in different asset classes. So things like alternatives and you know just. Just a lot of use of derivatives as well. So I think people are thinking about investing not just more, but they're investing differently. And now what we notice, we saw that across the board, but that was particularly magnified among the younger generation, particularly around around Gen. Z. Genzi was interesting because this is a generation that grew up where, you know, the friction around investing that maybe their parents or their grandparents had really, really didn't exist or doesn't exist. You know, you can open an account today, as I said, with, with no commissions, no account fees and start to trade very small amounts of money. So I think that's, that's, that's a good sign because in the survey we saw that Gen. Z actually started, those who invest, started investing when they were 19, which is way ahead of boomers and Gen. X and Millennial. So I think it's a good sign because of course, with investing. Hi, Miss such an asset. Yeah, absolutely, absolutely. I mean, I was looking at that chart early this morning. I just, I'm reviewing it again here and I see Gen. Z and they and they also, I think 1/4 of them had said that they had some exposure in school. If financial literacy has gained traction over the last whatever decade, I mean, you could call it whatever you want, but it's not something that was taught in yesteryear. Now you have stock clubs in 6th grade, right. And so what's interesting about Gen. Z, for example, you mentioned the 19 year olds. That are looking to put their money to work for baby boomers here on the chart from the wealth survey, it says 35 years old is where they they started investing. For Gen. X it was 32 years old and then millennials 25, etcetera. So it's nice to see more folks getting on board. One area to discuss too is the folks that don't invest and they have worries about money overall and and just don't have the same capabilities, I guess to put money to work. Yeah, that, that, that is always a concern and financial literacy is always a concern. It is great to see that the Generation Z starting so much earlier. But because of course, again, time is such an asset and having an extra decade or 15 years of investing can really change your outcomes and material way over the over the over your lifetime. But as you point out, there's still too many folks who are not investing. I think as an industry and certainly this is a focus of Schwab, how do we continue to invest in financial literacy and how do we remind people that that as I mentioned, the friction of investing is so low right now? Just get in and, and get started and, and you know, whether you're a long term investor or when you're young, you know it's OK to to be a short term investor too and then try some trading. But the most important thing is to get in early. And I think that's a priority for Schwab and should be a priority for the industry. Yeah, yeah. That, that's true. That early is the key, right? That compounded dollar buy and hold and growth investing always more than 50% of the folks have been interested in that. That's something that we know well. But there are other things that are more recent innovations, as I was saying, more tools, more options for folks, fractional share investing, direct indexing, socially responsible investing, automated robo advisor investing and thematic investing. These are exciting opportunities for folks to make their money work for them, right? They are and I think what we see is actually the younger generation is, is a generation that's most likely to lean in with some of those new innovations you talked about. Think for younger folks, everything that you learn entire live there about personalization and curation. They want, you know, they want curated experiences, they want curated service, they want curated products and solutions. And of course that applies to investing as well. So when we launch things like thematic investing, we're seeing broad adoption, but the most but the highest adoption is among among the younger generation because they want to invest according to their values. According to what they're interested in. And so you know, it is, it is great to see. You also mentioned personalized index. You know, that's a, that's an exciting one as well. I think there's a lot of folks out there who are really intrigued by the tax office that can be created through through personalized index. And so the amount of innovation in the category is, is, is pretty amazing given given that how long we've been at it. But it's exciting to see the innovation and it's exciting to see that you have folks folks adopting.