The financial services industry, like many others, is grappling with how to best engage what is now the nation’s largest demographic: the millennial. This elusive group of 20-to-35 year olds is 83.1 million strong, representing a quarter of the entire population, and have an estimated $200 billion in buying power. Further, it’s expected that millennials stand to inherit a staggering $30 trillion in wealth transferred from Baby Boomers. So, it came as no surprise that during Edelman’s 2015 Financial Services Trust Barometer breakfast in Chicago, the conversation and questions continually turned back to millennials and the broader sector’s struggle to understand this incredibly diverse group that is rapidly becoming their primary consumer demographic.
To dig deeper into this, Edelman’s Financial Services sector commissioned some research of its own. The study closely examined how millennials — including specific ethnic and cultural groups — view money and how it helps the group achieve their personal objectives and live their values. The ultimate goal: Help companies grasp the nuance within this demographic to better engage them and become trusted partners.
We plan to delve into delve into the research findings from diverse perspectives — which is fitting, given that millennials are more diverse than the generations that preceded them (44 percent are part of a minority race or ethnic group) and they reflect a broad variety of life stages — from college students to heads of households with families and developed careers.
There is no question that a huge opportunity exists for financial services companies to help millennials plan their financial futures. So, what are key takeaways from the study? Among them, broadly, millennials:
- Believe the American Dream is still possible today, but their vision differs from that of other generations. The top indicator of success cited by millennials is family, not money, followed by education, health/wellness, and faith.
- Face tough challenges in achieving their financial goals, with many reaching their key personal milestones — such as getting married and having children — faster than their financial objectives, leaving them uncertain about their financial stability.
- Encounter major barriers that make long-term saving an uphill struggle, as 47 percent support their families financially and 39 percent have debts that keep them from saving. Half say they have enough money just to meet day-to-day needs.
- Acknowledge they’re not planning for the long-term and money management makes them nervous. Sixty percent aren’t actively saving for the long-term, and one in three has a retirement plan. Only one in two feel “in control;” and just 20 percent think they’ll be able to retire at 65.
- Know what they want from financial services companies, including the availability of mobile and digital apps to manage their everyday banking and, for half of them, local bank branches to handle their money management.
For financial services marketers, what are key implications and insights of the study? The role of money is less about the accumulation of wealth (at least for now) and more about traditional values and understanding the nuances of cultural variances in goal setting. That’s because each ethnicity views success — family, faith, education, etc. — differently. Those distinctions are critical, and we will explore them on a deeper level.
View the full results for more insight.
Alaina Kleinman is a senior account supervisor with Financial Communications in Chicago.
Originally published at www.edelman.com on February 25, 2016.
