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FINRA Foundation

Angelita Plemmer Williams (202) 728-8988
Mike Rote (202) 728-6912

New FINRA Foundation Research: Two-thirds of U.S. Investors Fail Investing Quiz and Face Confusion about Investment Account Fees

Number of Women With Non-Retirement Investments Remains Stagnant, While Ownership Among Men, Millennials and African-Americans Increases

USFC Brochure CoverWASHINGTON – Knowledge of key investing concepts among investors is low, with two-thirds of U.S. adults who own taxable investment accounts failing to correctly answer more than half of the questions contained on a 10-question quiz of investor knowledge, according to new research released today by the FINRA Investor Education Foundation (FINRA Foundation).

The study, Investors in the United States: A Report of the National Financial Capability Study, indicates that many investors are confused about the various fees they pay for investing. Nearly one-third of investors believe they do not pay any fees or expenses at all for their investment accounts or they don’t know how much they are paying.

“This study is a comprehensive exploration of the investing habits, attitudes and knowledge of Americans, including an expanded analyses of the use of brokers/advisors, websites, mobile apps, cryptocurrencies, investment vehicles, preferred investment information sources and responses to market drops,” said Gerri Walsh, President of the FINRA Foundation and FINRA’s Senior Vice President for Investor Education.

“While the data cannot tell us why certain trends have emerged, they do provide researchers with valuable insights surrounding gender disparities, generational differences and emerging trends in the use of technology,” Walsh added.

Just under one-third of the nation’s population have investments in non-retirement accounts.  While the number of men who have non-retirement investments has increased, the number of women with non-retirement investments has remained flat since 2015. However, ownership among millennials, ages 18-34, and African-Americans is increasing.

The study is based on data from approximately 2,000 survey respondents who indicated that they have investments held in non-retirement accounts, though most also have retirement accounts, as well.

Some of the key findings from the study include:

  • Investor knowledge in the United States is low.
    In addition to the incorrect responses to the investing quiz, nearly half of those surveyed (46%) think that the past performance of an investment is a good indicator of future results. Less than a third (30%) understand that the main advantage of index funds over actively managed funds is generally lower fees and expenses.
  • A large majority of investors are aware of cryptocurrencies (85%).
    Nearly one in five (18%) are considering investing in cryptocurrencies, and 12% are already invested. While awareness is consistent across age groups and portfolio values, younger investors (ages 18 to 34) and those with portfolios of less than $50,000 are much more likely than average to consider cryptocurrency investments and invest in them.
  • Investor preferences for receiving disclosures are shifting.
    The percent of investors preferring to receive their disclosures by postal mail dropped sharply from 49% in 2015 to 36% in 2018. Conversely, the percent preferring to receive their disclosures via email increased from 27% to 33%.
  • Investors use more than one approach when making investment decisions and executing trades.
    Among investors who allow a professional to choose investments for them, nearly three-quarters (72%) also make decisions on their own at least some of the time. Similarly, among those who trade online, more than half (51%) also trade through their financial advisor.
  • Most investors (75%) feel they have access to the information needed to make investment decisions.
    Free online services, websites and blogs are the most frequently cited channels for obtaining investment information (46%), followed closely by newspapers, magazines, and books (42%). Social media is used for investment information by only 17% of respondents.
  • Usage of investing-related tools like BrokerCheck or is low (7% and 9%, respectively).
    However, in spite of low investor knowledge, investors are less concerned about investment fraud. Investor confidence in the ability of regulators to prevent fraud has increased.
  • Investors are more likely to overestimate than underestimate their portfolio’s performance.
    Only 4% think their portfolio will underperform the market, compared to 29% who think their portfolio will outperform. Men are more likely than women to believe they will beat the market (32% vs. 25%).
  • Investors appear to take market volatility in stride.
    When asked how they responded to the precipitous stock market drop in February of 2018, only 7% of investors reported selling securities. More than one in five (22%) took the event as an opportunity to buy more stocks.

“These research findings underscore the need for researchers, policymakers, advocates and industry stakeholders to continue to develop innovative investor tools and resources to better educate investors and to help protect them from fraud,” Walsh said.    

To access the full report, datasets, survey instrument and methodology, visit Test how you fare on the Investor Knowledge Quiz.

FINRA Investor Education Foundation
The FINRA Investor Education Foundation supports innovative research and educational projects that give underserved Americans the knowledge, skills and tools to make sound financial decisions throughout life. For more information about FINRA Foundation initiatives, visit

FINRA is a not-for-profit organization dedicated to investor protection and market integrity. It regulates one critical part of the securities industry—brokerage firms doing business with the public in the United States. FINRA, overseen by the SEC, writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and brokerage firms and their registered employees. For more information, visit