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The population of retail investors is changing: they’re getting younger and bringing different habits and preferences to investing, based on research from the FINRA Investor Education Foundation.

The FINRA Foundation released a new study that documents some of the recent shifts in retail investor demographics in the U.S., based on the latest wave of its National Financial Capability Study, which was carried out in the second half of 2021.

Among other things, the survey found that 21% of respondents began investing in the previous two years — almost as many as started in the preceding eight years (25%).

These new younger investors were more likely to engage in riskier investing, it found.

For example, 36% of younger investors said they’ve traded options, compared to just 8% of those aged 55 and older. And 23% of younger investors have used margin to invest, versus just 3% of older investors (55+).

These younger investors were also much more likely to have traded “meme” stocks, with almost 40% of younger investors saying they’d invested in prominent meme stocks (AMC, GameStop and Blackberry), compared with 4% of older investors.

Over half of the new investors (less than two years’ experience) also owned crypto assets, the survey found.

While the assets that these newer investors are trading are different, the “how” and “why” they trade are different too.

The survey found that younger investors were much more likely to trade via a mobile app. As a result, the use of trading apps was up 30% from the previous version of the survey, which was carried out in 2018.

The most common way to trade was through an online website (62%), the survey found, with mobile apps and advisors tied for second place at 44% each.

Additionally, while younger investors aimed to make money trading, the research found that they were also “much more likely than older investors to invest for reasons other than long-term profits, such as social responsibility, entertainment and social activity.”

The social aspect of trading was also evident in younger investors’ usage of social media, with 60% saying they use social media as a source of investing information, compared with 8% of older investors.

In particular, 56% of younger investors relied on YouTube and 41% used Reddit for investing information.

Among other things, the survey found that email surpassed physical mail as investors’ preferred method of receiving disclosure, with 38% favouring email to 30% for snail mail.

It also noted that the level of investor knowledge was relatively low. The average score on a 10-question investor knowledge quiz was just 4.7. And “many investors are unaware of or confused about various fees they may pay for investing,” it said.

“The valuable insights from the study can help policy-makers, regulators and educators rethink the tools and channels necessary to educate and protect both long-time investors and the rising generation of new investors,” said Gerri Walsh, president of the FINRA Foundation, in a release.