For Gen Y, Family And Friends Trump Advisors For Advice

By Cyril Tuohy

InsuranceNewsNet

Generation Y, young adults from 21 to 36 years old, turn to their spouses, parents and friends first for financial advice, and these young adults put a premium on saving instead of investing, according to a new report from UBS.

The report underscores how hard this generation has been hit by the Great Recession, if not by the loss of assets, then by having seen others lose their wealth, the report also found. Savings habits of Generation Y, the report found, are even comparable to the savings habits of Americans who came of age during the Great Depression.

“The Next Gen investor is markedly conservative, more like the World War II generation who came of age during the Great Depression and are in retirement,” wrote the authors of the UBS Investor Watch report titled “Think You Know the Next Gen Investor? Think Again.”

Gen Y, also known as millennials, values advice, the report found.  It appears Gen Yers are integrating online research into the portfolio of advice channels at their fingertips: family, friends, websites, social media and financial professionals.

“Rather than relying exclusively on social media and online sources, millennials tell us that they look for face-to-face advice from people they trust, and who listen to them — particularly family or a family-referred professional,” the report said.

That someone is more likely to be a spouse, parent or friend than a financial advisor.

When asked where they sought advice, the survey found big differences between millennials and other generations.

As many as 62 percent of millennials went to a spouse or partner for advice compared to 55 percent for non-millennials; 41 percent of millennials went to parents compared to only 4 percent of non-millennials; and 14 percent of millennials went to a financial advisor compared to 40 percent for non-millennials.

“While most millennials do not have a professional financial advisor, that does not mean they are self-directed; in fact only 9 percent made their last key financial decision without consulting someone,” the report said.

The best advice millennials said they have received from any source is to save, live within means, limit debt and invest, the report also found.

Two trends mark this generation to a greater degree than Generation X and the baby boomers before them, the report said: the speed of technology and volatility of assets.

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at cyril.tuohy@innfeedback.com.