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.
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.
Millennials want annual returns that are 9.2% above inflation
75% say they'd take safety over performance
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.
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.
Government program such as public pensions
Contributions from my children (cash, living space, etc.)
Sale of primary residence or business
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?
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.
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
6. Many Millennials don't understand active vs. passive investing
Many Millennials have significant misconceptions about what passive investments can and cannot do.
say index funds are less risky.
say passive investments will protect them on the downside.
say passive investments provide access to the best opportunities.
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.
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.
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.
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.
To learn more about how to connect with Millennial investors, read our full report.
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.