Generations Y and X, respectively, are hungrier for investment advice than other investors, a trend that could propel growth in the advisory business going forward. Fully 45% of Generation Y investors, many of them cautious and conservative, indicated a need for increased advice, while 36% of Gen X concurred with them
According to the latest MFS Investing Sentiment Survey, those results contrast with the 27% of all investors who claim their need for professional investment advice has risen over the last 12 months.
Younger investors are allocating assets in a manner similar to their grandparents, according to Bill Finnegan, senior managing director and head of U.S. marketing at MFS. Gen Y investors aged 18 to 30 years old are placing 33% of their assets in cash, up from 30% in February. Across all age brackets, 27% of their investable assets are in cash.
The question of whether to seek advice is no longer an issue, Finnegan says. Most investors today acknowledge the need for it.
But if returns on cash vehicles remain as miniscule as they are and Gen Y investors remain as conservative as they have been, their retirement goals could be difficult to reach. Though retirement is decades away, 54% of Gen Y investors said they were more concerned than ever about being able to retire when they thought and 44% said they had lowered their expectations about quality of life in retirement.
Finnegan posits that part of their gloomy outlook has been colored by observing the experience of their baby boomer parents, many of whom are deciding to delay retirement in the wake of the financial crisis.