Bank of America Merrill Lynch

Shifting trends on financial security and investing

We’ve seen millennials pave their own path to financial freedom, often changing the way they approach traditional life milestones. Now, across all generations, we’re seeing a heavy reliance on others to achieve financial success. This is the case for baby boomers, many of whom are facing retirement, Gen Xers and millennials. It is especially true for today’s youngest generation—Generation Z—as the number jumps to nearly two-thirds saying they are relying on an inheritance, particularly from their parents, grandparents and even friends, according to a Merrill Edge® Report released earlier this year.1


Can’t spell ‘independence’ without dependence

Despite describing their approach to financial decision making as “do-it-myself” (87%), Gen Z, today’s youngest generation, is more than twice as likely (63%) to depend on an inheritance. Gen Zers aren’t just looking to mom and dad for money―they are also counting on their friends (17%), grandparents (17%) and extended family (14%).1

63% of Gen Z report relying on an inheritance.1


An intersection of digital and physical

Investors are making it clear they want the best of both worlds when it comes to financial guidance. They want digital tools at their fingertips, but they are still most likely to turn to an advisor over their family and friends for financial advice.1

Americans are increasingly comfortable with emerging technology, including artificial intelligence, when it comes to finances. They believe that in their lifetime, all financial decisions will be made with the help of technology and all money will be digital. In looking to the next 20 years, 78% predict the highest performing stocks will be for technologies that do not exist yet.1

When it comes to receiving financial advice, Americans still value knowledge and expertise. More investors (81%) are turning to professionals, like financial advisors, for counsel.1 That being said, one of five would prefer digital advice over in-person guidance, and half are turning to finance apps for financial advice.

81% of investors are turning to professionals, like financial advisors, for counsel.1


Additional report findings

The trend toward socially conscious investing continues to be important to Americans who seek to align their investments with companies who share their values—but not to the point of sacrificing profit. The majority (60%) say they are more likely to invest in a profitable company with values they disagree with than a struggling company that shares their values (40%).1

Takeaways

Flexibility to communicate through multiple channels is key to engaging a variety of demographics.

Promote digital tools, such as those accessed on Benefits OnLine® Education Center, as well as in-person seminars and one-on-one consultations.

Leverage the vast array of financial education resources to deliver helpful information directly to your employees.

Download the full report.

1 Merrill Edge Report, Spring 2018.

Methodology: Convergys (an independent market research company) conducted a nationally representative, panel-sample online survey on behalf of Merrill Edge April 9-20, 2018. The survey consisted of 1,000 mass affluent respondents throughout the U.S. Respondents in the study were defined as aged 18 to 40 (Gen Z/Millennials) with investable assets between $50,000 and $250,000 or those aged 18 to 40 who have investable assets between $20,000 and $50,000 with an annual income of at least $50,000; or aged 41-plus with investable assets between $50,000 and $250,000. For this purpose, investable assets consist of the value of all cash, savings, mutual funds, CDs, IRAs, stocks, bonds and all other types of investments such as a 401(k), 403 (B), and Roth IRA, but excluding primary home and other real estate investments. We conducted an oversampling of 300 mass affluents in Atlanta. The margin of error is +/- 3.1 percent for the national sample and about +/- 5.6 percent for the oversample market, reported at a 95 percent confidence level.

Generational Breakdown for This Report
• Gen Z: Ages 18–22
• Millennials: Ages 23–40
• Gen X: Ages 41–53
• Baby Boomers: Ages 54–72
• Seniors: Ages 73+