Breaking the Millennial Myth: 6 Insights into Investor Behavior

  • August 27, 2019
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Think you know who Millennial investors are? You might be surprised.
Our research reveals that the stereotypes about Millennials — they’re lazy, they live in their parents’ basement, they’re self-obsessed — doesn’t hold true for many. In reality, aged 23–38, many Millennials are no longer “kids.” They’re pushing 40, and are an economic force, buying homes and raising families. And they have retirement in their sights.

The Natixis Investment Managers Global Survey of Individual Investors reveals Millennials have a unique outlook on the markets and investing. Financial professionals who ignore them could be missing out on a substantial opportunity. Our deep dive on Millennials separates myth from fact, and shows you where the greatest potential may lie.

1. Millennials are a powerful, adult economic force

The stereotype is that Millennials are drifting aimlessly, but the majority of those in our survey demonstrate that they’re very much goals-focused and risk-conscious with their finances. They just need a little direction.

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They’re thinking about their financial future

%64%

have clear
financial goals

%59%

say they have a
financial plan

They have a good head start on saving
(savings as a % of annual income)

`

%10.9%

Millennials

%12.1%

Generation X

%13.5%

Baby Boomers

They have long-term goals, but a short-term outlook

%87%

report that their investment time horizon is less than ten years

%27%

Less than 3 years

%37%

3–5 years

%23%

5–10 years

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To learn more about how to connect with Millennial investors, download our full report.

2. Millennial investors are surprisingly conservative

They want higher investment returns, but the majority aren't willing to take on the risk to get there.

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Millennials want annual returns that are 9.2% above inflation

HOWEVER

75% say they'd take safety over performance

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To learn more about how to connect with Millennial investors, download our full report.

3. Millennials understand that their retirement funding is multi-dimensional

Millennials want to retire early, at age 61, and live in retirement for an average of 24 years.
To do this, they plan to rely on a variety of common global income sources.

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%89%

Personal retirement savings

%79%

Personal investments

%77%

Workplace retirement plan

They also say they'll count on less dependable sources of income – like inheritance or contributions from their children.
These sources vary significantly from region to region around the world.

North America

 

0%

Europe

 

0%

Latin America

 

0%

Asia

 

0%

Middle East

 

0%

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To learn more about how to connect with Millennial investors, download our full report.

4. Millennials may actually trust people more than their phones

Many people assume that Millennials prefer digital services and peer-to-peer recommendations for making decisions. In reality, they report that they place a lot of trust in their financial professional. Only 44% prefer digital advice over in-person advice.

Who do Millennials trust for investment advice?

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87%

Me

86%

My financial professional

71%

Friends, family and co-workers

66%

Financial
institutions

58%

Financial media

39%

Social media

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To learn more about how to connect with Millennial investors, download our full report.

5. Millennials want their investments to reflect their values

One part of the Millennial Myth that seems to hold up is the image of social activism. Millennials are making a clear connection between their assets and their social views.

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%75%

%73%

%75%

%78%

It is important to know my investment is doing social good

If a company in one of my holdings had negative environmental and/or ethical issues, I would sell it

There are companies I don't want to own because they violate my principles

It is important to know I am investing in companies that reflect my personal values

Yet, only 58% understand that index funds1 include companies that may not be compatible with their personal values.

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To learn more about how to connect with Millennial investors, download our full report.

6. Many Millennials don't understand active vs. passive investing

Many Millennials have significant misconceptions about what passive investments can and cannot do.

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Perception

Reality

65%

say index funds are less risky.

Passive has no-risk management.

67%

say passive investments will protect them on the downside.

Up or down, passive investments deliver market gains and market losses.

62%

say passive investments provide access to the best opportunities.

Passive includes every opportunity, good and bad.
A majority actually values true active management: 69% say they prefer to have an expert find the best investment opportunities.

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To learn more about how to connect with Millennial investors, download our full report.

3 ways to meet the needs of Millennial investors

Millennials may have a good head start on financial planning, but they need help from the financial services industry to successfully navigate today’s complex markets and achieve long-term financial success.

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Sound financial education

Only 56% of Millennials say that their investment knowledge is strong. A key opportunity to earn their trust may be offering them solid financial education.

Tailored advice

63% of Millennials say they worry more about missing their investment goals than about beating the benchmark. Time invested in defining goals, timelines, and plans will help professionals build strong, trust-based relationships.

ESG investments2

Millennials have said loud and clear that they want their investments to reflect their personal values. Strategies that include ESG investments can help address this concern.

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To learn more about how to connect with Millennial investors, read our full report.

The Natixis Investment Managers 2017 Global Individual Investor Survey included 8,300 investors in 26 countries with the goal of understanding their views on the markets, investing and measuring progress toward their financial goals. Of the 8,300 investors surveyed, 2,434 are Millennials (defined as ages 21-36).

1 An index fund is a type of mutual fund with a portfolio constructed to match or track the components of a financial market index.

2 ESG investing focuses on investments in companies that relate to certain sustainable development themes and demonstrate adherence to environmental, social and governance (ESG) practices, therefore the Fund's universe of investments may be reduced. It may sell a security when it could be disadvantageous to do so or forgo opportunities in certain companies, industries, sectors or countries. This could have a negative impact on performance depending on whether such investments are in or out of favor.

All investing involves risk, including the risk of loss. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

You cannot invest directly in an index. Indexes are not investments, do not incur expenses and are not professionally managed.

Unlike passive investments, there are no indexes that an active investment attempts to track or replicate. Thus, the ability of an active investment to achieve its objectives will depend on the effectiveness of the investment manager.

This material is provided for information purposes and should not be construed as investment advice.

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