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June 29, 2016

Millennials more bullish on market and confident of investment knowledge than boomers

Survey sheds light on differences between millennial and baby boomer investors

ST. PAUL, Minn.--(BUSINESS WIRE)--Seventy-one percent of millennial investors predict a bull market in the next one to three years, compared to 50 percent of baby boomer investors. Forty-two percent of millennial investors say they are very knowledgeable about investments, compared to 17 percent of boomers.

These are just two of the key differences uncovered in a study of millennial and baby boomer investors. To compare generational investment behaviors and reactions to the market volatility that began late last summer, Securian Financial Group conducted a survey of 1,997 investors, inclusive of 1,040 millennials and 957 boomers.

“Confidence is a trait younger generations of Americans have never possessed in short supply,” said David Kuplic, Securian’s chief investment officer and executive vice president of Advantus Capital Management, a Securian asset management subsidiary. “Their natural self-assurance, along with the market growth most have experienced since coming of investment age after the financial crisis, could explain the gap between millennials and boomers, who have experienced many more highs and lows.”

The survey did find similarities shared by millennial and boomer investors, but differences were frequent and noteworthy.

Millennials more confident across the board

  • 12 percent of millennials say they are not very knowledgeable about investments, compared to 25 percent of baby boomers.
  • While $1 million was most frequently cited by both generations as the amount they would need to save to feel confident in retirement, more millennials (52 percent) than boomers (45 percent) are confident that they’ll reach their savings goal. More boomers (11 percent) than millennials (4 percent) are not confident that they will reach their goal.

An investment style surprise

  • A plurality of millennials (39 percent) and a majority of boomers (51 percent) say they are moderate investors—but surprisingly—more millennials (15 percent) than boomers (8 percent) say they are very conservative investors.

After financial advisors, very different sources for advice

  • 65 percent of both millennials and boomers seek investment advice from financial advisors.
  • The second-most cited source of investment advice for millennials is family (54 percent) and for boomers is news outlets (39 percent).
  • Millennials are much more likely than boomers to seek advice from money management websites (49 to 29 percent), banks (41 to 15 percent), friends (39 to 18 percent), blogs (25 to 7 percent) and social media (13 to 3 percent).

Millennials more concerned about market volatility

  • More millennials than boomers (42 to 29 percent) expressed high levels of concern about market volatility and its impact on them reaching their retirement goals (49 to 39 percent). Millennial investors also are more concerned than boomers about protecting themselves from a volatile market (54 to 43 percent) and understanding the reasons behind a volatile market (51 to 37 percent).
  • Millennials are far more likely than boomers to take action (i.e., buy more shares, sell shares, shift shares) during periods of market volatility. Most boomers—59 percent—say their typical reaction to a falling market is to leave their portfolio alone, compared to 37 percent of millennials. Similarly, in a rising market, 61 percent of boomers say they make no changes to their portfolio, compared to 40 percent of millennials.

“The different levels of concern and reactions to market volatility could again speak to the experiences of the two generations,” said Kuplic. “Volatility is a relatively new experience for most millennials, while boomers have ‘been there, done that’ before.”

Survey screening

The survey was conducted online in December 2015. The minimum annual household income threshold was $75,000 for baby boomers (ages 51-69) and $50,000 for millennials (ages 23-38). Additionally, both generations had to have investments outside of employer-sponsored retirement plans.

About Securian Financial Group

Since 1880, Securian Financial Group and its affiliates have provided financial security for individuals and businesses in the form of insurance, investments and retirement plans. Now one of the nation’s largest financial services providers, Securian is the holding company parent of a group of companies that offer a broad range of financial services. Advantus Capital Management, a wholly-owned subsidiary of Securian, is an institutional asset manager specializing in public and private fixed income, managed volatility, real estate securities and other income-oriented equity strategies. As of March 31, 2016, Advantus has $34 billion in assets under management.

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Jeff Bakken

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