Two studies indicate that Millennials have a distinctive mindset when it comes to finances and investing compared with their parents and grandparents.
A study by Spectrem Group, "The Investing Habits of Millennials," reveals that more than a quarter of all Millennials do not use a financial advisor, including 24% of those with more than $1 million in net worth. Nearly 40% of Millennials also indicate they are likely to use a robo-advisor in the future.
One-third of Millennials with a net worth below $1 million want to use their wealth to benefit society. More than 60% of
non-millionaire Millennials are concerned about having enough retirement income to live comfortably.
Another research report by Resonate in collaboration with the Association of National Advertisers about consumer preferences in the financial services sector suggests that while nearly one-quarter (23%) of all adults would consider an online-only bank, the majority (63%) of this group are not Millennials.
While Millennials are a mobile-friendly banking group, they make up less than half (48%) of mobile banking users, according to the study, “Winning on the ‘Why’ in Financial Services.”
“Simple assumptions that Millennials are mostly driven by mobile or social media preferences are narrow-sighted,” says Pat LaPointe, EVP at Resonate, in a release. “In fact, there is a very large group of older consumers of financial services who are just as digitally and technically savvy as the Millennials, and equally willing to un-bank or bank with non-traditional financial services brands.”
Non-millionaire Millennials tend to be more concerned about national issues than their Millionaire counterparts, particularly on matters such as tax increases and stock market performance, according to the Spectrem Group study. All Millennials, however, are less concerned about all national concerns compared to the older generations. This is especially so when it comes to tax increases, the political environment, terrorism and stock market performance.
Seven out of 10 Millennials expect they will have sufficient income to live comfortably during retirement, according to the Spectrem Group study. As one would expect, more than half of Millennials are willing to take significant investment risk on a portion of their portfolio compared to their older counterparts. This is most likely due to the fact that they are younger, and therefore have more time to wait out any dips in their investments.
Financial decisions made by Millennials reflect their coming-of-age experiences during the Great Recession, and their subsequent difficulty starting a career, aggregating savings and purchasing a home, according to the Resonate study.
More than half (56%) of Millennials do not value financial security when making important life decisions and one-third of Millennials believe they will not need a bank at all within five years, according to the Resonate study.