Meet the new class of “Gen I” investors, shaped by the pandemic: Schwab
This large group is bound together not by their birth years but by when they got started in their investing journey.
They have a median age of 35, with an average income of $76,000 (although half live paycheck to paycheck). More than half say they will save more after the pandemic subsides; 43 percent say they plan to invest more; and 42 percent plan to work on reducing their total debt. Who are they? Generation I.
Related: What the GameStop short squeeze could mean for retirement savings
“We’ve seen tremendous growth and engagement among individual investors over the past year,” said Jonathan Craig, senior executive vice president and head of investor services for Charles Schwab.
“A big part of this growth is Generation Investor — the large number of people who are bound together not by their birth years but by when they got started in their investing journey — who are now on a path to ownership and reaching their financial goals,” Craig said.
The growth, and Generation I’s presence, he said, is due to “lower trading costs, new products and services aimed at greater ease and accessibility, and the investing opportunities presented by market volatility.“
Craig adds, “And while it’s exciting to see this new generation of investors, the industry now has a call to action, to give this group the tools and services they need to be successful over the long term.”
Although more than a third of Gen I has a written financial plan in place, many admit that they have not thought about the tax efficiency of their portfolio (41 percent) or do not fully understand how fees work (51 percent).
Many also say they have important life milestones on the horizon — moving to a new state or home (21 percent), starting a new career or job (24 percent) or preparing to have a baby (14 percent).
This trend is creating opportunities for financial advisors.
“Now that they’ve dipped their toes into investing, Gen I is eager to keep learning and evolving its strategies to successfully build wealth for the long term,” said Andrew D’Anna, senior vice president for Schwab’s retail client experience.
“What we found in our survey is that this group is not all short-term risk takers — they want to make informed decisions backed by education and professional guidance, which will be important as they navigate different life events.”
READ MORE: