Scottrade Financial Behavior Study. Scottrade Financial Behavior Study 1

Transcription

1 2016 Scottrade Financial Behavior Study Scottrade Financial Behavior Study 1

2 Scottrade Financial Behavior Study Scottrade, Inc. commissioned a survey of investors to explore their attitudes and behaviors regarding investing, the economy, finance and retirement. The survey, undertaken by Harris Poll, was conducted among a nationally representative sample of 1,015 adults in the U.S. age 18 and older who are involved in investment decisions for their household and have $2,500 or more in investments with a full-service brokerage company, online brokerage company or independent financial advisor. By looking at their responses collectively, Scottrade is able to identify trends among investors. American investors surveyed represent both genders and four generations: Men: 566 Women: 449 Millennials (ages 18 34): 164 Generation X (ages 35 49): 210 Baby Boomers (ages 50 69): 485 Seniors (ages 70 and older): 156 This year s study uncovers several differences between the genders and generations. Scottrade Financial Behavior Study 2

3 Key Financial Trends in 2016 Investor Perceptions and Behavior 1. Investors Are Optimistic About the U.S. Economy, but Mixed About the Market 4 2. Investors Report Investment Success in the Past Year and Expect More of the Same 8 3. Many Investors Could Benefit from the Expertise and Advice of a Professional Financial Advisor 11 Differences by Gender 4. Men Are More Confident Investors than Women; Women Are More Moderate Men Have a More Active Investing Style Than Women; Women Are Staying the Course Women Have a More Trusting and Dependent Advisor Relationship Than Men 20 Differences by Generation 7. Younger Generations Have a More Positive Outlook on the Economy and Their Own Investments Younger Generations Are Much More Interested in Do-It-Yourself Investing 28 Scottrade Financial Behavior Study 3

4 Investor Perceptions and Behavior 1 Investors Are Optimistic About the U.S. Economy, but Mixed About the Market Looking ahead to 2017, investors are generally more optimistic than pessimistic that the economy will continue to grow. But their feelings about the stock market appear more variable and even lukewarm. Investors are equally likely to feel neutral or positive about the coming year but many (about one-quarter) anticipate a decline in the market. Both the optimists and pessimists base their feelings about the stock market on their overall confidence in the macrolevel economy; i.e., more positive feelings about the economy lead to more positive feelings about the stock market, and the same is true on the negative side. The national and international political landscape also have a big influence on investor confidence and decision-making. Feelings about U.S. politics, national security and the international climate in general seem to generate a more negative outlook for the stock market. And, about half of investors say they will choose how and when to invest based on the outcome of the 2016 presidential election. That said, there are other factors like a decrease in unemployment and a strong corporate performance that will prompt greater stock market optimism. Scottrade Financial Behavior Study 4

5 The majority of investors (56%) are optimistic about the U.S. economic outlook over the next 12 months and are even more optimistic than they were a year ago when 50% of investors expected growth. (Figure 1) However, nearly four in 10 (38%) describe themselves as bullish, expecting the stock market to improve over the next 12 months. A similar 38% are neutral and about one-quarter (24%) expect the market to decline. (Figure 2) Those who are bullish cite economic factors as the reason for their optimism better economy (73%), stronger corporate earnings (46%), and lower unemployment (38%). Those who are bearish cite political and international factors among the reasons for their pessimism U.S. political climate (77%), international political climate (54%), worsening U.S. economy (55%), international financial issues (49%), and national security (48%). (Figure 3) Figure 1 What do you think will happen with the economy over the next 12 months? Strong/Some growth Stay the same Strong/Some decline 56 % 25 % 18 % Figure 2 Thinking about the next 12 months, how would you describe yourself? 24 % Bearish I think the stock market will decline 38 % Bullish I think the stock market will improve 38 % Neutral I think the stock market will stay the same Investors say the stock market (52%) and the presidential election (47%) are likely to be the biggest influencers on investing decisions over the next 12 months. (Figure 4) 5 Investor Perceptions and Behavior: Investors Are Optimistic About the U.S. Economy, but Mixed About the Market 5

6 The U.S. political climate (e.g., the presidential election) Expect the U.S. economy will improve International political issues (e.g., regime change, contested elections, war/conflict outside the U.S.) International financial issues (e.g., changes in monetary/financial policies, debt or financial crisis, debt default outside the U.S., Brexit) Expect the U.S. unemployment rate will get lower Figure 3 Why are you bullish/bearish about the market? Expect corporate earnings will improve National security issues Expect the Federal Reserve will raise interest rates Expect the U.S. economy will worsen Reduction in oil prices Increase in oil prices Expect the U.S. unemployment rate will get higher Expect corporate earnings will worsen Expect the Federal Reserve will lower interest rates Natural disaster(s) Other Key: Bullish Bearish 6 Investor Perceptions and Behavior: Investors Are Optimistic About the U.S. Economy, but Mixed About the Market 6

7 Figure 4 Which of the following may impact your investing decisions over the next 12 months? Please select all that apply. 52 % The general performance of the stock market 47 % Presidential election 34 % General interest rates 30 % Inflation rates 30 % Foreign events/wars 21 % The U.S. deficit 21 % Price of gas 20 % Income taxes 18 % The real estate market 14 % Price of groceries 13 % Unemployment rates 1 % Other 13 % None of the above Nearly half of investors say they will choose how and when to invest based on the outcome of the 2016 presidential election. 7 Investor Perceptions and Behavior: Investors Are Optimistic About the U.S. Economy, but Mixed About the Market 7

8 Investor Perceptions and Behavior 2 Investors Report Investment Success in the Past Year and Expect More of the Same Looking back at the past year and ahead to the next, investors report success in their investment choices. Most investors (even more than last year) say the value of their portfolio has improved over the past year and about four in 10 say they are in a better place right now financially. Moreover, about four in 10 are especially enthusiastic; they believe they are outperforming the market and doing even better than they counted on. This optimism continues to build for the coming year. The majority envision even more growth for 2016 and attribute at least some of this confidence to the economy. Scottrade Financial Behavior Study 8

9 Seven in 10 investors say the value of their portfolio increased over the past 12 months, compared with 58% who said the same in Most expect that trend to continue, with six in 10 predicting their financial portfolio will increase in Additionally, more than two-thirds of investors (68%) are confident about their own portfolio due to the economy. (Figure 5, 6) Figure 5 How did the value of your investment portfolio change over the past 12 months? Increased a lot/a little % % Decreased a lot/a little 18 % 9 % Figure 6 In 2016, how do you think your financial portfolio will perform compared with 2015? Increase a lot/a little 60 % 7 % Decrease a lot/a little 9 Investor Perceptions and Behavior: Investors Report Investment Success in the Past Year and Expect More of the Same 9

10 Four in 10 (40%) feel they are financially better off than they were a year ago, and nearly half (45%) predict they will be financially better off 12 months from now. (Figure 7, 8) Thirty-seven percent feel their portfolio is doing better than the market. (Figure 9) Thirty-eight percent of investors said the change in their investment portfolio was better than expected. (Figure 10) Figure 7 Compared to a year ago, would you say you are financially...? Much better off Somewhat better off About the same Somewhat worse off Much worse off 4 % 7 % 10 % 33 % 46 % Figure 8 Looking ahead 12 months from now, do you expect to be financially? Much better off Somewhat better off About the same Somewhat worse off Much worse off 4 % 9 % 9 % 36 % 42 % Figure 9 Compared with the market in general, do you think your personal portfolio is... Figure 10 Was the change in the value of your investment portfolio better or worse than you expected? Doing much better than the market 7 % Doing somewhat better than the market On par with the market 30 % 50 % 38 % 48 % 14 % Doing somewhat worse than the market Doing much worse than the market 1 % 8 % Much/somewhat better than expected As expected Much/somewhat worse than expected Not sure 5 % 10 Investor Perceptions and Behavior: Investors Report Investment Success in the Past Year and Expect More of the Same 10

11 Investor Perceptions and Behavior 3 Many Investors Could Benefit from the Expertise and Advice of a Professional Financial Advisor Despite a generally rosy perception of what the future will hold, many investors (about four in 10) are still quite worried about how next year s economy will impact their portfolio. About half of investors admit they lack at least some knowledge and occasionally feel overwhelmed about how to make the best possible investment choices. Some of the younger age groups (Millennials and Gen Xers) demonstrate the least confidence in their own ability to manage their portfolio successfully. Of these younger investors between one-third to one-half express concern that they will not be able to meet their long-term investment goals and that retirement may be out of their reach. At least two in three wish they had access to a reliable advisor who could offer investment guidance they can trust. Scottrade Financial Behavior Study 11

12 About four in 10 (41%) investors are worried that their portfolio will not be able to withstand major changes in the economy over the next 12 months. (Figure 11) About half of investors don t feel they know enough about the impact various economic factors will have on their portfolio (49%) and say they feel overwhelmed by all of the investment choices that are available (53%). Figure 11 How much do you agree or disagree with the following statements about the impact of the economy on your investment portfolio over the next 12 months? I have built a diversified portfolio that can weather changes in the economy I am confident I will make the right decisions to adapt to any changes in the economy Agree Totals 88 % 81 % A sizable minority of Millennials and Gen X don t think they will be able to retire (43% and 35%, respectively) or meet their retirement goals (54% and 44%). Additionally, more than half of Millennials (66%) and Gen Xers (56%) admit they are overwhelmed by all of the investment choices and wish they had access to trustworthy investment guidance (69% and 66%, respectively). I expect there will be changes to the economy that will help my portfolio I expect there will be changes to the economy that will hurt my portfolio I don't feel I know enough about what impact various economic factors will have on my portfolio I am worried that my portfolio will not be able to withstand major changes in the economy 70 % 59 % 49 % 41 % Key: Millennials Gen X Boomers Seniors 12 Investor Perceptions and Behavior: Many Investors Could Benefit from the Expertise and Advice of a Professional Financial Advisor 12

13 The most commonly selected motivation for using/considering using a financial advisor is investors wanted help with managing or monitoring their investments (47%) followed by not being sure what to do on their own (41%). Younger investors (Millennials and Gen X) are more likely than their older cohorts to say a shift in financial goals such as child-related expenses or saving for a house or car prompted their decision (21%) and 19 percent of Millennials cite a poor investment decision as the impetus. (Figure 12) Figure 12 Which of the following situations motivated you to use or consider using a professional financial advisor? I wanted help with managing or monitoring my investments I wasn't sure what to do on my own Had more money to invest than I did previously Positive change in personal financial situation (e.g., new job, pay raise, marriage, inheritance) Had a certain threshold of money to invest Totals 47 % 41 % 21 % 20 % 18 % Change in financial goals (e.g., child-related expenses, saving for a new house, buying a new car) 15 % Just something I am supposed to do 12 % U.S. political events (e.g., Presidential elections Congressional/midterm elections, Supreme Court rulings) 10 % Made a bad investment decision on my own 9 % Major economic events (e.g., recession, the Fed changing interest rates, changes in oil prices) 8 % Key: Millennials Gen X Boomers Seniors 13 Investor Perceptions and Behavior: Many Investors Could Benefit from the Expertise and Advice of a Professional Financial Advisor 13

14 Differences by Gender 4 Men Are More Confident Investors than Women; Women Are More Moderate When reflecting on their current financial situation, women and men seem to experience about the same amount of stress (or lack of stress). But with respect to the actual performance of their investments, men generally express a much higher degree of confidence. Over the past year, the majority of men and women report seeing an increase in their portfolio (but men more so than women), and men are nearly twice as likely as women to feel they are beating the current market. Moreover, men exude more confidence (and fewer nerves) that their investments will do well in the current economy, and most men (compared to only about half of women) envision further portfolio growth in When looking to the near-term future (about one year from now), men are more certain that they will be better off financially. So while actual financial performance may be relatively similar for men and women, women tend to be more reserved than men in their predictions for the future. Scottrade Financial Behavior Study 14

15 Three-quarters of men and about six in 10 women say their portfolio has increased in the past 12 months (74% and 62% respectively). (Figure 13) Figure 13 How did the value of your investment portfolio change over the past 12 months? Men Women Women are no more stressed about their current financial situation compared with men (37% vs. 34% are very/somewhat stressed). But, men (74%) are more confident in their investments in the current economy, compared with 59% of women. (Figure 14, 15) Men are much more likely than women to believe they are doing better than the market (44% vs. 24%), while women are more likely to believe they are on par with the market (60% vs 44%). And, 41% of women are nervous about their investments, compared with only 26% of men. Increased a lot/a little Decreased a lot/a little Figure 14 How stressed are you about your current financial situation? Men 74 % 62 % 7 % 11 % Figure 15 How are you feeling about your investments today due to the current economy? Men 34 % 66 % 74 % 26 % Women 37 % 63 % Women 59 % 41 % Key: Very/somewhat stressed Not at all/not too stressed Key: Very/somewhat confident Not at all/not too nervous 15 Differences by Gender: Men Are More Confident Investors than Women; Women Are More Moderate 15

16 Men are more confident than women that their portfolio will increase in 2016 (67% vs. 49%), while women are more likely than men to believe their portfolio will remain flat (39% vs. 24%). (Figure 16) Figure 16 In 2016, how do you think your financial portfolio will perform compared with 2015? Men Women Female investors are more likely than men to expect changes in the economy over the next 12 months that will hurt their portfolio (66% vs. 55%). Increase a lot/a little 67 % 49 % Half of male investors think they will be better off financially 12 months from now, compared with about one-third of women (50% vs. 36%). (Figure 17) Decrease a lot/a little 7 % 7 % Figure 17 Looking ahead 12 months from now, do you expect to be financially? Much/somewhat better off 36 % 50 % About the same 39 % 8 % Much/somewhat worse off 11 % 16 % Key: Men Women 16 Differences by Gender: Men Are More Confident Investors than Women; Women Are More Moderate 16

17 Differences by Gender 5 Men Have a More Active Investing Style Than Women; Women Are Staying the Course In general, men appear to take a more active approach to investing than women. Men make decisions and changes far more frequently (often in either six-month or even one-month intervals). Furthermore, it is more common for men to say that their trading is on the rise from one year ago and that they will continue to actively look at their portfolio and may even make changes mid-way through this coming year. By contrast, women (about three in 10) are more likely to have done nothing (placed no trades) over the past year, compared to only 21 percent of men. So generally speaking, men and women tend to take different approaches to investing, with men making more frequent changes and women taking a steady and stable approach. Scottrade Financial Behavior Study 17

18 While many men and women have a trading strategy of holding a long-term position (48% men, 43% women), over one in four male investors (26%) hold a short-term position with a time horizon of two weeks or less, compared with 12% of women. Three in 10 female investors do not have a trading strategy, compared with 15% of men. Figure 18 How often do you change your strategy (i.e., get more conservative, get more aggressive) in your investment portfolio? More than once a month Men Women 21 % 11 % Four in 10 (41%) male investors say they change their investment strategy every six months or more often, and 21% do so monthly or more often. By comparison, 27% of women change their strategy every six months or more, and only 11% do so every month or more often. (Figure 18) 1 6 months 7 months to one year 21 % 11 % 16 % 8 % In fact, 28% of female investors haven t changed their investment strategy at all since setting up their portfolio, compared with 19% of men. Less than annually 24 % 30 % Don't know/don't remember 5 % 7 % 18 Differences by Gender: Men Have a More Active Investing Style Than Women; Women Are Staying the Course 18

19 While most men and even more female investors made no changes in their level of trading activity (64% vs. 72%), men are almost twice as likely as women to say they are trading more actively now than they were 12 months ago (25% vs. 13%). Male investors are more likely than women to plan to make changes to their portfolio in the next 12 months, based on the past year s performance (44% vs. 27%). (Figure 19) Three in 10 female investors (30%) did not place any trades in the past 12 months, compared with 21% of men. (Figure 20) On average, men made almost twice as many trades as women in the past 12 months (22 vs. 12 trades). Figure 19 Do you plan to make any changes to your investment portfolio over the next 12 months based on its performance over the past 12 months? Men Women 44 % 56 % 27 % 73 % Figure 20 Approximately how many trades did you make in the past 12 months, excluding any automatic investments and excluding contributions to retirement accounts like a 401(k) or 403(b)? 0 Trades 21 % 30 % Key: Yes No Average number of trades Key: Men Women 19 Differences by Gender: Men Have a More Active Investing Style Than Women; Women Are Staying the Course 19

20 Differences by Gender 6 Women Have a More Trusting and Dependent Advisor Relationship Than Men Men and women are almost equally likely to rely on a professional advisor for investment support, but that appears to be where many of the similarities in their relationship with an advisor end. In fact, the nature and frequency of the relationship each gender has with an advisor differs substantially. According to survey responses, many women feel overwhelmed by the investment choices that are available and express less confidence in their own ability to navigate any impact from the economy (a majority of women compared to a minority of men in both cases). Women are more likely to prefer having someone (professional) to consult with rather than do it themselves and are more likely to feel that the support is worth paying for (while men are more likely to criticize the fees). More women than men initially turn to an advisor because they want general help monitoring or managing their investments, while more men tend to have more tangible rationales for reaching out they have crossed a certain money threshold or have made a bad decision previously. And female investors count on their advisors to handle a much larger proportion of their portfolio and are more likely to cite their advisor as the motivation for making various investment choices. That said, regardless of whether they take their guidance, men seem to consult their advisors more frequently (even monthly) than women do. Scottrade Financial Behavior Study 20

21 Two-thirds of both male and female investors use a financial advisor (65% and 66%), but women handle a greater proportion of their investments through their advisor, versus on their own, compared with men. Figure 21 What percent of your investments do you handle through a broker or advisor versus on your own? Your best estimate is fine. Men 51 % 49 % Female investors use an advisor to manage about two-thirds of their investments, and manage one-third on their own (63% and 37%), while men are more evenly split (51% and 49%). (Figure 21) Women Key: Through a broker or advisor On my own 63 % 37 % Nearly six in 10 male investors (59%) say they prefer to manage their investments themselves, compared with 42% of women. Men are also more likely than women to feel the fees they pay to advisors are not worth the service they get (43% vs. 29%). (Figure 22) Figure 22 How much do you agree or disagree with the following statements about investing and your investments? I prefer to manage my investments myself Agree 42 % 59 % That said, nearly three in ten men (29%) check in with their advisor monthly or more often compared with 12% of women. Overall, the fees I pay to make investments are not worth the service I get 29 % 43 % Key: Men Women 21 Differences by Gender: Women Have a More Trusting and Dependent Advisor Relationship Than Men 21

22 Figure 23 Which of the following situations motivated you to use or consider using a professional financial advisor? Please select all that apply. I wanted help with managing or monitoring my investments I wasn't sure what to do on my own Had more money to invest than I did previously Positive change in personal financial situation (e.g., new job, pay raise, marriage, inheritance) Had a certain threshold of money to invest Change in financial goals (e.g., child-related expenses, saving for a new house, buying a new car Just something I am supposed to do U.S. political events (e.g., Presidential elections, Congressional/midterm elections, Supreme Court rulings) Made a bad investment decision on my own Major economic events (e.g., recession, the Fed changing interest rates, changes in oil prices) Became aware of an unfamiliar investment product Made an investment decision that resulted in a significant loss Non-U.S. political events (e.g., financial crisis, changes in monetary/financial policy, regime change in other countries) Unexpected financial needs (e.g., unexpected health expenses, unplanned home or car repairs) Negative change in personal financial situation (e.g., loss of a job, pay cut, divorce) A bull market A bear market Retirement Wanted a second/professional opinion Free services/came with the account Other Key: Men Women Differences by Gender: Women Have a More Trusting and Dependent Advisor Relationship Than Men 22

23 When describing what motivated them to use or consider using an advisor, women are more likely than men to have wanted help managing or monitoring their investments (58% vs. 40%) and more women indicate that they weren t sure what to do on their own (47% vs 37%). Men are more likely than women to have/had a certain threshold of money to invest (21% vs. 11%); have made a bad investment decision on their own (13% vs. 4%); or have a decision that resulted in a significant loss (8% vs. 2%). (Figure 23) Nearly two-thirds of female investors (64%) say they feel overwhelmed with all of the investment choices available, compared with less than half of men (46%). (Figure 24) Six in 10 women also say they don t feel they know enough about the impact various economic factors will have on their portfolio, compared with less than half of men (60% vs. 43%). (Figure 25) Figure 24 How much do you agree or disagree with the following statements about investing and your investments? 46 % of men Agree I feel overwhelmed by all of the investment choices that are available 64 % of women Figure 25 How much do you agree or disagree with the following statements about the impact of the economy on your investment portfolio over the next 12 months? 43 % of men Agree I don t feel I know enough about what impact various economic factors will have on my portfolio 60 % of women 23 Differences by Gender: Women Have a More Trusting and Dependent Advisor Relationship Than Men 23

24 Differences by Generation 7 Perceptions of the economy tend to become less and less rosy with age. Younger Generations Have a More Positive Outlook on the Economy and Their Own Investments The majority of both Millennials and Gen Xers foresee the economy growing over the course of the next year, compared to less than half of their older peers. There is a similar sense of declining optimism with respect to personal investments. While most adults in all age groups are hopeful that their investments will improve, the younger groups (Millennials and Gen Xers) are even more so. Millennials are by far the most confident in their ability to outpace the market and feel that their portfolio will increase in 2016, followed by Gen Xers. Reality may mirror these perceptions as Millennials, followed by Gen Xers, are most likely to say their investments performed well in the last 12 months. All that said, a slight majority of Millennials express concern over their current financial condition and their ability to meet their financial goals. This apprehension seems to decline significantly with age, with Seniors the most upbeat. Many Millennials even worry that they will never be able to retire, which is not the case for the vast majority of Boomers and Seniors who have already neared or reached that life stage. Scottrade Financial Behavior Study 24

25 Over three-quarters (77%) of Millennials and 60% of Gen Xers think the economy will grow in the next 12 months, compared with 47% of Boomers and 43% of Seniors. (Figure 26) All age groups are fairly hopeful (77% Millennials, 74% Gen Xers, 62% Boomers, 60% Seniors) about their own investments due to the economy, but Millennial and Gen X investors are the most optimistic. And, Millennials are more likely to feel they are doing better than the market (49% Millennials, 40% Gen X, 28% Boomers, 34% Seniors). (Figure 27, 28) Figure 26 What do you think will happen with the economy over the next 12 months? Strong/ some growth Stay the same Strong/ some decline 14 % 29 % 29 % 30 % 9 % 12 % 24 % 28 % 47 % 43 % 60 % 77 % Figure 28 Compared with the market in general, do you think your personal portfolio is... Much/somewhat better than the market On par with the market Much/somewhat worse than the market 9 % 7 % 9 % 9 % 28 % 34 % 49 % 40 % 41 % 46 % 56 % 53 % Key: Millennials Gen X Boomers Seniors Key: Millennials Gen X Boomers Seniors Figure 27 How are you feeling about your investments today due to the current economy? 23 % 26 % 38 % 40 % Millennials Gen X Boomers Seniors 77 % 74 % 62 % 60 % Key: Very/somewhat confident Very/somewhat nervous 25 Differences by Generation: Younger Generations Have a More Positive Outlook on the Economy and Their Own Investments 25

26 Millennial investors portfolios did marginally better than that of other age groups in the past year (79% of Millennials say the value of their portfolio increased, compared with 72% of Gen Xers, 67% of Boomers and 62% of Seniors). (Figure 29) Millennial investors are the most optimistic that their portfolio will increase in 2016 (76% Millennials, 63% Gen X, 53% Boomers, 49% Seniors). (Figure 30) Figure 29 How did the value of your investment portfolio change over the past 12 months? Increased a lot/a little Stayed about the same Decreased a lot/a little Not sure Key: Millennials Gen X Boomers Seniors Figure 30 In 2016, how do you think your financial portfolio will perform compared with 2015? Increase a lot/a little Stay about the same Decrease a lot/a little Not sure Key: Millennials Gen X Boomers Seniors 26 Differences by Generation: Younger Generations Have a More Positive Outlook on the Economy and Their Own Investments 26

27 More than half of Millennials (54%) and 44% of Gen Xers are concerned they will never meet their financial goals, compared with 30% of Boomers and 21% of Seniors. (Figure 31) Figure 31 How much do you agree or disagree with the following statements about investing and your investments? Agree Millennials Gen X Boomers Seniors Similarly, 43% of Millennials and 35% of Gen Xers don t think they will ever be able to retire, compared with very few Boomers (14%) and Seniors (7%) who are in or near retirement. Millennials are the most concerned about their current financial situation (50% Millennials, 38% Gen Xers, 30% Boomers, 21% Seniors say they feel very or somewhat stressed). (Figure 32) I am concerned that I will never be able to meet my investment goals I don't think I will ever be able to retire 54 % 43 % Figure 32 How stressed are you about your current financial situation? 44 % 35 % 30 % 14 % 21 % 7 % Millennials Gen X Boomers Seniors 50 % 50 % 62 % 38 % 70 % 30 % 79 % 21 % Key: Not very/not at all stressed Very/somewhat stressed 27 Differences by Generation: Younger Generations Have a More Positive Outlook on the Economy and Their Own Investments 27

28 Differences by Generation 8 Younger Generations are Much More Interested in Do-It- Yourself Investing Unlike their older peers, younger investors (Millennials and Gen Xers) generally prefer to be in charge of their own investing decisions and choose a nearly mix between investments they handle personally and those that are managed by an advisor. For older cohorts, the split is closer to respectively. That said, these younger investors (Millennials and Gen Xers) tend to be more skeptical on whether the guidance they receive from advisors is actually worth the money (Millennials are three times more cynical of fees than their Senior counterparts). At the same time, a majority of these same younger cohorts wish they had access to trustworthy advice. Scottrade Financial Behavior Study 28

29 Nearly two-thirds of Millennials (65%) and Gen Xers (62%) say they prefer to manage their investments themselves, compared with 43% of Boomers and 44% of Seniors. (Figure 33) Boomer and Senior investors handle a greater proportion of their investments through a broker or advisor rather than on their own, compared with Millennials and Gen Xers, who have a nearly even split (Millennials 48% through an advisor and 52% on their own; Gen Xers 50% each; Boomers 60% and 40%; Seniors 65% and 35%). (Figure 34) Six in 10 Millennials (61%) feel the fees they pay to advisors are not worth the service they get, compared with 44% of Gen Xers, 27% of Boomers and 20% of Seniors. Figure 33 How much do you agree or disagree with the following statement about investing and your investments? Millennials Gen X Boomers Seniors I prefer to manage my investments myself 43 % 44 % Figure 34 What percent of your investments do you handle through a broker or advisor versus on your own? Your best estimate is fine. 62 % 65 % Millennials Gen X Boomers Seniors Through a broker or advisor 48 % 50 % 60 % 65 % On my own 52 % 51 % 40 % 35 % 29 Differences by Generation: Younger Generations Are Much More Interested in Do-It-Yourself Investing 29

30 About the 2016 Scottrade Financial Behavior Study Scottrade s Financial Behavior Survey was conducted online from July 18 August 2, 2016 among 1,015 adults in the U.S. age 18 and older who are involved in investment decisions for their household and have $2,500 or more in investments with a full-service brokerage company, online brokerage company or independent financial advisor. This online survey is not based on a probability sample, and therefore, no estimate of theoretical sampling error can be calculated. For complete survey methodology, please contact mediarelations@scottrade.com. Member FINRA/SIPC