The BlackRock Foundation and Commonwealth Launch National Research Effort to Understand First-Time Investors Who Entered Capital Markets Since 2020

Rhea-AI Summary

The BlackRock Foundation and nonprofit Commonwealth have launched 'The Investor Diaries,' a research initiative backed by a $1 million grant to study new retail investors who entered capital markets since 2020, focusing on those earning low to moderate incomes ($30,000 to $80,000).

The project will track investors through voice diary entries, a national survey, and analysis of transaction data. During 2020-21, 46 million new brokerage accounts were opened in the U.S., an 80% increase over two years, with over 75% of these investors remaining active today.

The study partners with investment platforms Betterment and moomoo, following dozens of individual investors over 18 months through interviews and transaction tracking. The research aims to provide insights for the investing industry, financial platforms, and policymakers to better support new investors from low to moderate-income households.

Positive

• Research initiative backed by substantial $1 million grant
• Partnership with established platforms Betterment and moomoo for comprehensive data collection
• Long-term study spanning 18 months for in-depth analysis

Negative

• None.

Supported by a $1MM grant from The BlackRock Foundation, "The Investor Diaries" will shed light on investors earning low to moderate incomes; pave the way for more sustainable wealth-building

BOSTON, Jan. 14, 2025 /PRNewswire/ -- The BlackRock Foundation and national nonprofit Commonwealth launched "The Investor Diaries," a research initiative designed to better understand the millions of new investors who entered retail capital markets in the U.S. since 2020, particularly those earning low to moderate incomes (LMI). By following these investors through voice diary entries, a national survey, and analysis of large transaction data sets representing millions of investment decisions by people earning LMI, the project shines a light on their unique financial circumstances, motivations, behaviors, needs, and the role that capital market investing plays in the overall financial wellness of LMI households. The initiative aims to equip the investing industry, financial platforms, and policymakers with important insights to support and sustain this and future generations of new investors. 

During 2020-21 alone, 46 million new brokerage accounts were opened by individual investors in the U.S., an 80% increase over a two-year period. Despite the prediction that this might be a temporary surge, more than 75% of these new investors remain invested today.

Partnering with Investing Platforms
The Investor Diaries will feature real-time research with people earning LMI ($30,000 to $80,000) who are currently investing, capturing their unique stories through their experiences and transaction data. The longitudinal research study will follow dozens of individual investors over 18 months, conducting observational diary-style interviews and tracking their transactional behavior on an ongoing basis. Many are among the first in their families to invest.

Commonwealth has partnered with investment platforms Betterment and moomoo to capture participants' experiences with both robo-advised and self-directed platforms:

• Betterment – For investors who don't want to pick their own stocks, Betterment's easy-to-use, automated investment technology offers diversified, expert-built portfolios and continually monitors the investments, rebalances the portfolios, and reinvests the dividends.
• moomoo – Moomoo offers an accessible platform for self-directed investors of all levels to confidently make their own investment decisions with advanced tools and features to help guide their trades.

The Investor Diaries will also include a large National Perceptions and Habits Survey and a parallel study of macro-level investor transaction data to better understand the broad investing behaviors of this population. 

"The Investor Diaries will provide a groundbreaking holistic view of those living on modest incomes who are new to investing in the past five years," says Timothy Flacke, CEO, Commonwealth. "Understanding the choices and actions of these new market participants, and where existing platforms and tools are serving these new investors well—and falling short—will inform the next wave of investing innovations and help ensure broader capital market participation is a sustainable, productive source of wealth creation." 

Commonwealth's past research has demonstrated an unmet appetite for investing among LMI households and the early positive impact of this type of market participation on financial stability and mobility.

"Measuring household investing behavior will help determine how supported these new market participants feel in their investing experience," says Claire Chamberlain, President, The BlackRock Foundation. "The insights derived from The Investor Diaries can help inform product solutions, investor education, and outreach strategies to optimally support LMI households in building and sustaining wealth via the capital markets."

For more information about The Investor Diaries, please visit https://buildcommonwealth.org/research/investordiaries

About Commonwealth
Commonwealth is a national nonprofit building financial security and opportunity for people earning low- to moderate-income through innovation and partnerships. For over two decades, Commonwealth has designed effective innovations, products, and policies enabling over 2 million people to save nearly $8 billion. Commonwealth collaborates with consumers, the financial services industry, employers, and policymakers. Because Black, Latin, and women-led households disproportionately experience financial insecurity, we focus especially on these populations. The solutions we build are grounded in real life, based on our deep understanding of people who are financially vulnerable and how businesses can best serve them. To learn more, visit us at www.buildcommonwealth.org. 

About The BlackRock Foundation
Helping people earn, save, and invest - earlier, more often and for their futures. Guided by BlackRock's history of making saving and investing more accessible and affordable, The BlackRock Foundation funds and partners with organizations that elevate the voices and experiences of LMI households. With our partners, we aim to 1) support individuals in their efforts to build a financial safety net to protect against shocks that widen disparities and 2) make it easier to build wealth and support upward mobility. With Commonwealth and partners, BlackRock's Emergency Savings Initiative has provided access to more than 10 million people and led to $2 billion in new liquid savings between 2019 and 2022.

About Betterment 
Betterment LLC ("Betterment") is the largest independent digital financial advisor, using automated technology powered by human expertise to fulfill a singular mission: making people's lives better. With easy-to-use saving, investing, and retirement solutions, Betterment is built to help people optimize their money, no matter their level of experience or how the market is doing. Launched in 2010, Betterment helps more than 900,000 customers manage over $50 billion with curated selections of low-cost, expert-built investing portfolios; personalized guidance; and tax-smart tools. The company has received multiple awards for its investing app, including Buy Side from WSJ (2024). Learn more and for additional disclosure on these awards, visit https://www.betterment.com/#award-disclosure.

About moomoo
Moomoo is an investment and trading platform that empowers global investors with pro-grade, easy-to-use tools, data, and insights. It provides users with the necessary information and technology to make more informed investment decisions. Investors have access to advanced charting tools, technical analytics, and in-depth data. Moomoo grows with its users, cultivating a community where investors share, learn, and grow together in one place. Moomoo provides free access to investment courses, educational materials, and interactive events that any investor, at any level, can gain from. Users can join forum discussions, trending topics, and seminars to better their investment knowledge and insights. The moomoo app is offered by Moomoo Technologies Inc. ("MTI") a company that is based in Jersey City, New Jersey. The app is used globally in countries including the U.S., Singapore, Australia, Japan, Malaysia and Canada. MTI is not a broker-dealer and does not provide investment advice or recommendations. In the U.S., securities products and services are offered by Moomoo Financial Inc. ("MFI"), an SEC-registered broker-dealer and member FINRA/SIPC. MTI and MFI are indirect, wholly-owned subsidiaries of Futu Holdings Limited (Nasdaq: FUTU). For more information, please visit Moomoo's official website at www.moomoo.com/us.

Contact:
Jackie Jusko
216-374-0945

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SOURCE Commonwealth

FAQ

What is the purpose of The Investor Diaries research initiative?

The Investor Diaries aims to understand new investors who entered retail capital markets since 2020, particularly those earning low to moderate incomes ($30,000-$80,000), through voice diary entries, surveys, and transaction data analysis.

How many new brokerage accounts were opened during 2020-2021?

46 million new brokerage accounts were opened in the U.S. during 2020-2021, representing an 80% increase over a two-year period.

What percentage of new investors from 2020-2021 remain invested today?

More than 75% of the new investors who entered the market in 2020-2021 remain invested today.

Which investment platforms are partnering with The Investor Diaries research?

The research initiative has partnered with Betterment, offering automated investment technology, and moomoo, providing a platform for self-directed investors.

What is the duration and scope of The Investor Diaries study?

The study will follow dozens of individual investors over 18 months, conducting observational diary-style interviews and tracking their transactional behavior on an ongoing basis.