The Markets March 13, 2019

Self-Directed Brokerage Accounts Fell 10.6% in Value in 4Q18

Account values fell sharply from the previous quarter and were 6.3% lower than the previous year, according to Charles Schwab’s SDBA Indicators Report.

Reported by

The market volatility that occurred in the fourth quarter of 2018 weighed heavily on retirement plan participants’ self-directed brokerage accounts (SDBAs), with the average balance falling by 10.6% from the previous quarter to $246,153. Year-over-year, balances were down 6.3%.

At 37%, mutual funds held the highest percentage of participant asset, on par with the fourth quarter of 2017. This was followed by equities (28%), exchange-traded funds (17%), cash (15%) and fixed income (3%). Despite the high market volatility in the fourth quarter of 2018, participants averaged a mere 2.2 trades for the month.

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Among mutual funds, participants’ largest allocation was to large-cap funds (28%), followed by taxable bond funds (21%), international funds (16%), hybrid funds (12%) and small-cap funds (12%).

Among mutual funds with equity exposure, Apple was the top holding (9%), followed by Amazon (6.5%), Berkshire Hathaway (3%), Microsoft (2%) and Facebook (1.75%).

Among exchange-traded funds, investors allocated the most dollars to U.S. equity (48%), international equity (16%) and U.S. fixed income (15%).

Schwab also found that, on average, participants held approximately 10 positions in the SDBA. Baby Boomers and Gen X made up approximately 41% of SDBA participants each, followed by Millennials (12%).

The average age of a SDBA participant was 51. Seventy-six percent of SDBA participants were male, and 24% female.

The SDBA Indicators Report is based on data from 137,000 retirement plan participants who have balances between $5,000 and $10 million in their Schwab Personal Choice Retirement Account.

Products March 13, 2019

Oranj Pairs Account Aggregation with Financial Planning

Account aggregation is being offered to MoneyGuide users without an additional monthly subscription charge.

Reported by

Oranj, a provider of wealth management software, most notably account aggregation, has partnered with PIEtech, creator of the MoneyGuidePro financial planning software. Account aggregation is being offered to MoneyGuide users without an additional monthly subscription charge.

“Advisers need the whole picture and consistent data to do their best work for their clients,” says David Lyon, Oranj CEO. “Identifying held-away accounts can be an elusive chase for advisers. We want to simplify that through this integration. PIEtech has some of the best financial planning software in the industry, and this integration can be a powerful solution for advisers who need a better understanding of their client’s entire financial picture.”

Advisers can use the program by creating a free Oranj account. They would then enter their MoneyGuide credentials and then click on the MoneyGuide logo next to the client name to go to the respective household page within MoneyGuide. Oranj would then populate the account information with aggregated and held-away account information from more than 15,000 held-away account types, including banking, self-directed and retirement, and real estate accounts.

Oranj and MoneyGuide will be hosting an informational webinar on March 26 at 4 p.m. EST to explain this new offering. Those interested in attending can register here.

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