By Andrew Welsch

More Americans have been taking a hands-on approach to investing in recent years. That has / that is according to data from Broadridge Financial Solutions, a communication and financial technology company based in New York.

One-third of investors were self-directed in 2024, up from 21% in 2019. In contrast, 79% of investors had financial advisors, down from 88% in that time. The figures add up to more than 100% because some investors have an advisor and a self-directed account.

The bulk of assets are in advised accounts, but the share is sliding. Almost a quarter of assets were in self-directed brokerage accounts and 76% in advised accounts last year. That compares with 15% and 85%, respectively, in 2019, according to Broadridge's Investor Pulse data, which analyzes the taxable and IRA accounts of nearly 50 million U.S. investors. Broadridge's newly created Investor Pulse website could indicate if the trend towards self-directed investing slows this year due to the stock market sell-off.

American pop culture and media might suggest that self-directed investors are primarily small-dollar investors, but even the wealthy like to have a play-money brokerage account. Broadridge says although financial advisory firms retain the lion's share of investors' total assets, there is a steady shift from advice to online brokerage channels across all wealth tiers.

In 2024, asset share by DIY investors increased across each generation.

The Broadridge data underscores why more banks and brokerage firms are striving to attract self-directed investors. For example, JPMorgan Chase has been building up its self-directed brokerage platform in an effort to win more wallet share with its wealth management clients, many of whom have DIY brokerage accounts on the side. Other firms, such as Robinhood Markets, Charles Schwab, and Interactive Brokers, are competing fiercely for self-directed investors that trade actively.

That more Americans have become DIY investors is testament to how technology and economics have changed the nature of investing. Smart phones and apps have made it easier than ever to begin investing. Everyone is just a download and swipe away from their first stock purchase. In addition, trading commissions have fallen to zero, removing another barrier.

"The rise in self-directed investors can be attributed to the accessibility of online brokerages," says Andrew Guillette, vice president of global insights at Broadridge. "These platforms appeal to individuals across all generations and wealth segments who enjoy the investment process, seek diversification, and want to benefit from low-cost trading."

In addition to demographic changes, Broadridge's data show how investor portfolios are changing. Mutual funds' share of assets fell to 35.7% last year, down from 51.3% in 2019. Exchange traded-funds, which are more tax-efficient, have risen to 25% from 19%. And individual stock positions have jumped to 39.7% from 29.8%.

Self-directed investors tend to skew younger, while advised investors tend to be older. The self-directed cohort is also mostly male. Men have 54% asset share among advice channels and an even higher 61% share among DIY investors, according Broadridge's data.

Write to Andrew Welsch at andrew.welsch@barrons.com

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March 11, 2025 07:00 ET (11:00 GMT)

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