Retail Investor Trading in the US

Perspectives on Trading Preferences and Behaviors
by Ashley Globerman,  Isabella Fonseca, March 9, 2015
Industry Trends
North America

Abstract

Celent conducted a survey of retail investors across the United States to better understand this segment of the wealth management industry.

The aim of the report Retail Investor Trading in the US: Perspectives on Trading Preferences and Behaviors, is to present a detailed picture of the online trading industry in the US from the perspective of the retail investor. Celent will conclude by stating its findings and making recommendations as to where wealth managers should potentially focus in the near term to capture retail investors. 

“The global financial markets, traditionally reserved for professional traders, are accessible to retail investors across all demographics and trading experience levels,” says Ashley Globerman, an analyst with Celent’s Wealth Management practice and coauthor of the report. “The profile and demands of retail investors, particularly those of self-directed investors, have evolved greatly over time.”

The survey gauges their demographics, investing and trading behavior, product and service preferences, and technology adoption. The pool of survey participants ranges across all trading levels and demographics, such as age, gender, marital status, number of dependent children, and education and affluence levels. Some of the main findings of this survey are as follows:

  • The growth rate of self-directed investors continues to outpace that of non-self-directed investors.
  • Asset class preferences have changed slightly since Celent’s 2012 retail investor survey.
  • Dynamic client expectations continue to shape the wealth management industry.
  • There is investor demand for peripheral services outside of trading.

“As the wealth management industry and demands of retail investors continue to evolve, the importance of segmenting customers and adapting products and services based on their needs is increasingly critical in order for firms to remain competitive and gain broader market share,” says Isabella Fonseca, a research director with Celent’s Wealth Management practice and coauthor of the report.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Survey Overview

3

 

Key Research Questions

3

 

Qualifying Criteria

3

 

Survey Questions

6

Survey Participants

7

 

Demographics

7

 

Investing Behavior

10

Trading Behavior of Retail Investors

14

 

Trading Frequency

14

 

Investment Product Preferences

15

 

Trading Decision-Making

17

Online Trading Platforms

18

 

User Preferences and Platforms

18

 

Additional Services

19

 

Channel Preferences

27

Notable Comparisons Across Investor Profiles

29

 

Demographics and Trading Behavior

29

Opportunities and Recommendations

33

Leveraging Celent’s Expertise

35

 

Support for Financial Institutions

35

 

Support for Vendors

35

Related Celent Research

36

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