A brief surge in retail investors during the pandemic may be over, but wealth management firms nevertheless have an opportunity to convert more of them into clients, according to a new study.
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As shown in the charts below, which are based on a study released last month by the FINRA Foundation, investors with non-retirement accounts are much less likely to be beginners than they were only three years earlier. Even so, the combination of retail investors’ reliance on brokerage or advisory firm information resources and advice from financial advisors and other professionals — along with their continued low scores on knowledge tests — creates an opening for wealth management firms to provide value. If the results of FINRA’s survey are any indication, clearer fee explanations and fraud prevention tips could help many retail investors.
Two findings from FINRA’s survey of more than 2,800 U.S. adults with non-retirement investment accounts stood out to Anita Heisl, the chief client officer with compliance and marketing content firm Red Oak: a lower risk appetite and an increased level of engagement with social media content. Social media has turned into “such an important part of the business,” especially with “so many advisors heading into retirement” and firms needing to hire the next generation of planners and professionals, Heisl said.
“They are going to be social natives, they are going to be digital natives and they’re going to be used to communicating with those tools,” she said. “Advisors are going to need to play where their clients are.”
Part of that effort must involve education that breaks through noise without patronizing people who may not have the wealth, time or life experience to learn financial topics. That’s especially true with younger investors, said FINRA Foundation President Gerri Walsh.
“They still struggle with gaps in investing knowledge and risk assessment, which can leave them vulnerable to costly missteps,” Walsh said in a statement. “Investor education efforts remain critically important.”
Scroll down the page for key takeaways for financial advisors and wealth management professionals from the latest FINRA release of its nonprofit arm’s National Financial Capability Study. For analysis of other research displaying the record-breaking size of registered investment advisory firms, click here. To see data about web searches for financial advisors, follow this link.
Note: All of the below data comes from the December 2025 report, “Investors in the United States: Results from the FINRA Foundation’s National Financial Capability Study.” A third-party polling firm conducted the online survey between July and December 2024 with a sample of 2,861 U.S. adults who said they have non-retirement investments.
Dropping rates of non-retirement investments
In contrast with its last snapshot retail investor poll in 2021, FINRA researchers found that there has been a slight pullback in the share of adults with non-retirement accounts. The share of those non-retirement investors who have had their accounts for less than two years plummeted to 8% from 21% just three years earlier.
“The tide of new investors entering the market around the time of the pandemic has ebbed,” according to the study. “Just over a third (34 percent) of the U.S. adult population have investments in stocks, bonds, mutual funds or other securities outside of retirement accounts. This percentage has not substantially changed relative to 2021, ending the slight upward trend seen from 2015 to 2021. Though there is little movement in the overall percentage, the data reveal decreases in the prevalence of non-retirement investments among younger adults, people of color and men, reversing the increases seen for these groups in 2021.”
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Non-existent fees or lack of awareness?
Despite extensive regulatory requirements for wealth and asset management firms and discount brokerages to disclose fees to clients, many investors simply don’t know what they are paying.
For example, only 45% of mutual fund or ETF investors said they pay mutual fund or ETF fees or expenses. Another 41% said they paid no such fees or expenses, while 13% said they didn’t know.
Several factors could be contributing to this misunderstanding of the costs of investing. When asked to grade on a seven-point scale the extent to which they agree with the statement, “People like me aren’t usually investors,” at least 34% expressed some level of agreement. Another 17% were neutral, and 48% disagreed.
“Younger respondents and those with less investing experience are more likely to feel that they are not the typical investor,” the report said. “Black/African American and Hispanic/Latino respondents are also more likely to feel that individuals like themselves are not usually investors.”
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Investor proficiency remains a concern
Very few investors use regulatory databases such as FINRA BrokerCheck or read disclosures for investment funds or RIAs. The average survey participant correctly answered only 5.3 of 11 multiple-choice quiz questions testing their knowledge, with variation across topics. The highest scores were on queries about inflation (77%), risk and return (74%) and the definition of “stocks” (74%), while far fewer answered correctly about buying on margin (20%) and definition of short-selling (23%). In fact, 75% of the investors who said they invest on margin answered that question wrong.
This year’s poll also tested the participants for the first time on their ability to “recognize the hallmarks of investment fraud” by asking them about a “guaranteed, risk-free” vehicle promising annual returns of 25%, according to the study. Half the respondents said they would invest in it.
At the same time, non-retirement investors’ responses about the sources of investment information driving their choices suggest that they rely on more traditional resources alongside content from online “finfluencers.” At least 75% (the highest of any option) told surveyors they use research and tools from a brokerage or advisory firm, and 69% said they speak with a professional who advises them personally.
Information from friends, family or colleagues ranked fourth, at 65%, while 43% said they conduct research through online videos, the sixth-largest source. Among those using online content, YouTube, Reddit, Facebook, LinkedIn and Instagram were the most popular social media outlets. And consumption of finfluencer content correlated with age and ethnicity.
“Among respondents under 35, 61% say they make investment decisions based on finfluencer recommendations,” the study said. “Use of finfluencers declines dramatically with age. Newer investors and investors of color, particularly Black/African American and Hispanic/Latino investors, are also more likely to use finfluencers.”
