CAQ Study Sheds Light on Millennial Investors’ Concerns

Oct 13th 2015
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Millennial investors continue to be the topic of much discussion, yet a recent survey of these Generation Y members who are 18 to 34 years old indicates that they aren't dramatically different from older generations – except in four key areas: They are likely to take more risks, worry more about cybersecurity, put a premium on paying down debt, and save to buy a home.

The Center for Audit Quality's (CAQ) ninth annual Main Street Investor Survey is the result of two phone surveys of investors last summer: 1,012 investors with at least $10,000 in investments, and 1,000 millennials (250 nationwide and 250 each in the Houston, New York, and San Francisco areas) who were exempt from the investment-holdings criteria.

“With this new demographic focus and nearly a decade of comparative data, the [survey] provides a unique perspective – one from which policymakers, the private sector, and the broader public can all benefit,” CAQ Executive Director Cindy Fornelli said in an introduction to the survey results.

So let's drill down on this generation that has accountants and advisors so intrigued with how it ticks.

Risk-taking. While the majority of respondents in both groups considered themselves “pretty cautious,” millennials were slightly less so (44 percent), compared to all investors (49 percent). Millennials also were more willing to take on risk after doing research (35 percent) than all investors (26 percent).

Investment potential. In the next 12 months, 29 percent of millennials and 38 percent of all investors don't plan to make any investments. Almost half of millennials (43 percent) intend to make an investment that provides a steady, longer-term income, compared to 36 percent of all investors.

What to do with $10K. More than a third (38 percent) of millennials would use $10,000 to pay down student loans, credit card debt, or mortgages, compared to 31 percent of all investors. And 16 percent would put the money in savings or checking accounts, compared to 21 percent of all investors. The same percentage of millennials would invest in stocks, bonds, or mutual funds, compared to 18 percent of all investors. When asked why they would spend the money as they indicated, 35 percent of millennials said it was to pay down debt or interest, meet a life goal, buy a house, or travel, compared to 29 percent of all investors.

Investment risks. Millennials were more concerned than all other investors in three investment risk areas: cyberattacks targeting financial information or the markets (37 percent, compared to 32 percent of all investors), bad investment advice (19 percent, compared to 16 percent), and insufficient government regulation (16 percent, compared to 14 percent).

Biggest financial threats. The majority of both groups (55 percent of all investors and 47 percent of millennials) say their financial well-being is most threatened by insufficient savings for retirement and an inability to afford health care for a seriously ill or injured family member or themselves. But millennials (18 percent) were more concerned about job loss or inability to find a job than other investors (11 percent).

Trust in investment advice. Millennials are slightly less trusting (46 percent) of financial planners and advisors than all investors (49 percent), but slightly more trusting (15 percent) of family, friends, and colleagues than all investors (13 percent). Interestingly, the generation that often interacts only on social media is on par with all investors (both at 1 percent) for trustworthy financial advice on those sources – and 7 percent of both groups rely on publicly traded companies' financial reports.


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