SAN FRANCISCO – August 2, 2023 – SoFi Technologies, Inc. (“SoFi”), the digital personal finance company, released their first SoFi Invest¹ Midyear Investor Report² today, showing that most investors feel they’re falling behind what they believe to be their ideal investment amount for their age. While many have lamented Millennials getting a later start to investing than some other generations, Gen X’ers are carrying the biggest concerns of not being as far along in their investing journey as they should.
The SoFi Invest Midyear Investing Report looks at investors’ sentiment, investing trends, and habits at the halfway point of the year, including how different generations are approaching investing or feeling about the current economic climate.
“There is no ‘magic number’ for an investor’s portfolio that, once reached, will instantly signal their readiness for retirement or other major financial goals as everyone’s situation is different. But what this survey is telling us is that most people, regardless of their age, could benefit from approaches that make goal-setting less nebulous and more tangible,” said Nicole Casperson, SoFi Invest. “Investors across the generations are clearly more engaged and better educated than ever before. The next step is for them to leverage all that knowledge towards achieving more specific goals.”
Economic Outlook: Recession Fears & Optimism Collide
Amidst a turbulent 2023 and well over a year of rampant inflation, it’s no surprise that many investors think we’re already in a recession – to the tune of two-thirds of investors. However, 72% of investors are optimistic about the markets despite these recession fears. In fact, despite concerns of a downturn, 57% feel good about investing right now, and investors’ number one concern is not playing it safe but rather making sure they are investing enough during this period.
Money Matters: Where Investments Are Going
Despite a number of competing hype cycles, many investors are still using the tried and true as the building blocks of their portfolios: equities. The top five places investors are putting their money right now include:
3. Mutual Funds
5. Exchange Traded Funds (ETFs)
Beyond these vehicles, investors report they would rather invest in income-focused investments vs. growth investments right now, reflecting a desire for investors to supplement their current income with their investments vs. focusing on long-term potential gains. Interestingly, while income-focused investments are usually the domain of retirees and older investors, Gen Z and Millennials edge out Gen X and Boomers for prioritizing income investments over growth.
Investing Chatter: IRL & Online
It may seem like investing is all people have talked about since retail trading started to boom during the pandemic, and it is perhaps no surprise that 57% of investors say they discuss their investments with friends and family. However, this is largely dependent on an investor’s age, with Gen Z (64%) and Millennials (60%) much more likely to discuss, with Boomers (43%) least likely to partake in discussing their investments (Q22).
This behavior was possibly learned at home – while less than half the general population reported their parents discussing investing, 60% (Q31) of Gen Z’ers say investing was discussed growing up.
Additionally, with the rise of social media communities such as FinTok and subreddits dedicated to investing tips and tricks, nearly half (45%) of investors have made an investment decision based on something they saw on social media (Q47). Investors said social media (28%) was where they turned to most for investment education and recommendations after financial advisors and planners (29%).
When it comes to social media and investing, not all platforms are created equal – investors’ favorite places for advice and education are:
Robos Remain Popular; Representation a Challenge in the Advisor World
The debate over robo-advisors vs. traditional financial advisors has raged for years, but investors seem no closer to making a decision. Currently, 39% of investors use a robo-advisor (Q8), and 46% are working with a professional CFP or CFA (Q10).
One of the potential roadblocks to investors working with a financial advisor? Lack of representation – 71% of investors say they’d be more likely to work with an advisor if they saw themselves reflected across the table. Millennials (75%) and Gen Z (78%) investors especially feel this way compared to their Gen X and Boomer counterparts.
“Representation matters and while the financial advice industry has long acknowledged a need to grow more diverse, there are still obvious concerns among the investing public around whether they’ll be able to speak with and gather advice from someone who’s experiences and background better mirror their own,” added Nicole Casperson, SoFi Invest. “Robos versus humans is just one level of this debate. Robos, humans, diversity, and inclusion are part of a bigger financial picture which, when constructed properly, can harmoniously deliver investors a full range of insights and tools.”
Investing & AI
2023 has brought major developments on the AI (Artificial Intelligence) front and grand pronouncements of the ways in which AI will change the ways we work, communicate and even invest.
Halfway through 2023, around a quarter of investors say they want to use AI for investing and think AI will make investing easier. However, some investors are still cautious until there is more proof of its successes – nearly one-fifth of investors want to wait until there’s more evidence before they go all in.
See the full findings from the first SoFi Invest Midyear Investing Report here.
SoFi (NASDAQ: SOFI) is a member-centric, one-stop shop for digital financial services on a mission to help people achieve financial independence to realize their ambitions. The company’s full suite of financial products and services helps its more than 6.2 million SoFi members borrow, save, spend, invest, and protect their money better by giving them fast access to the tools they need to get their money right, all in one app. SoFi also equips members with the resources they need to get ahead – like career advisors, credentialed financial planners, exclusive experiences and events, and a thriving community – on their path to financial independence.
SoFi Technologies innovates across three business segments: Lending, Financial Services – which includes SoFi Checking and Savings, SoFi Invest, SoFi Credit Card, SoFi Protect, and SoFi Insights – and Technology Platform, which offers the only end-to-end vertically integrated financial technology stack. SoFi Bank, N.A., an affiliate of SoFi, is a nationally chartered bank, regulated by the Federal Reserve, OCC, and FDIC. The company is also the naming rights partner of SoFi Stadium, home of the Los Angeles Chargers and the Los Angeles Rams. For more information, visit SoFi.com or download our iOS and Android apps.
1. SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA(www.finra.org)/SIPC(www.sipc.org), (“SoFi Securities”). Clearing and custody of all securities are provided by APEX Clearing Corporation.
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Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Bank, N.A.
2. The SoFi Invest Midyear Investing Report findings are based on an online survey of 3,488 consumers conducted by SoFi Invest the U.S. between June 30 – July 10, 2023.