Natixis Investment Managers published a new report May 4, showing that Millennial clients are more likely that their Gen X or Boomer counterparts to have a financial advisor. 

“Millennials are actually the grown-ups in the room when it comes to financial planning,” say authors of the study and report entitled Five Financial Truths about Millennials at 40. “As the oldest Millennials enter their 40s, they’re hitting their highest-earning years and seeking professional advice to meet financial milestones.” 

To better understand the cohort, Natixis says it surveyed 275 Millennials in North America as part of a larger study of 2,459 Millennials globally. Natixis says the North American findings closely mirror the global trends presented in the report. 

The survey found that 72 per cent of Millennials have a financial advisor. Comparatively speaking, just 66 per cent of Generation X survey respondents and 70 per cent of Boomers were able to say the same. (The report overall draws on a survey of 8,550 investors in total, all of whom have minimum net investable assets of at least US$100,000.) 

Natixis says 69 per cent of Millennials are comfortable taking risks to get ahead, but 75 per cent would choose preservation of their assets over performance, if forced to choose. The survey also found that Millennials are careful savers, putting away 19 per cent of their income for retirement, on average. 

The report adds that Millennials not only recognize the value of advice, they trust their financial advisors almost as much as they trust themselves: 88 per cent say they trust their financial professionals when making financial decisions.

Other findings include: 

  • 46 per cent of Millennials don’t trust algorithms or artificial intelligence. Just five per cent rely solely on automated advice. Although 53 per cent say they prefer to receive financial advice through digital or online channels, “Millennials want to know a person is on the other end,” the report’s authors write. 
  • 79 per cent consider time spent with a financial advisor important to their long-term financial success. Most importantly, they want help managing volatility and discussing financial planning with family. (Of those surveyed, 67 per cent say they expect inflation to be one of the biggest risks to their financial security.) 
  • In considering environmental, social or governance (ESG) factors, 78 per cent say investing is a way to make a positive impact in the world; 63 per cent go so far as to say they have a responsibility to fix societal issues through their investments. That said, just 40 per cent have investments that incorporate ESG factors. A full 78 per cent, however, say fund managers should be looking at more than the financial aspects of a company when investing. 
  • Millennial clients hope to retire by the age of 59 on average. At the same time, however, 67 per cent say they accept that they may need to keep working longer than anticipated and 50 per cent say they may never have enough money to retire. The survey also found that 46 per cent say their financial security in retirement is going to take a miracle. 

“Almost half of Millennials believe they will never have enough money to retire. Fifty-one per cent say they are so stressed about retirement security that they avoid thinking about retirement altogether,” the report adds. “Most unsettling is that despite saving at high levels, 45 per cent of affluent Millennials think it will take a miracle to retire securely. The wealthier in this generation are even more worried, with 48 per cent of high-net-worth Millennials saying it will take a miracle even after they’ve amassed median assets of $2-million.” 

Overall, 51 per cent say they are interested in financial planning services to help alleviate some of these concerns. Of those surveyed, 34 per cent say financial planning with their family was one of the most important facets of their relationship with a professional advisor. “The turn to personal advice may be related to where Millennials are in life,” Natixis’ researchers write, highlighting the fact that as Millennials enter their 40s, they are also hitting their highest-earning years, which in turn coincide with more complicated financial needs. 

“This is a life stage that often triggers other key financial events such as buying a home and starting a family. In turn, this can trigger demand for everything from education savings to estate plans and wills. In essence, Millennial finances are becoming more complicated. It stands to reason that this drives demand for personal advice.”