Slowly but surely, millennials are bucking the stereotype of unemployed, debt-ridden college graduates living in their parents’ basements.
According to a recent study from Nashville-based roboadvisor iQuantifi, most millennials plan on purchasing a financial products over the next year, but many will change banks, brokers or advisors first.
The 2016 Millennial Money Mindset Survey finds that the workforce’s youngest generation is increasingly engaged in financial planning, seeking out financial institutions and reducing their debt, and there are signs that millennials are turning the corner: 70 percent of the survey’s respondents intend to purchase or open a new financial product within the next 12 months.
This occurs as millennials address their issues with debt. While 70 percent of millennials indicated that they carry debt, the total average debt is down 9.3 percent compared to last year’s levels, from $47,689 to $43,264.
As they emerge from their financial purgatory, millennials may be taking a more hands-on approach with their finances. More than one third of respondents, 36 percent, intend to change primary financial institutions within the next 12 months. That percentage climbs to almost 56 percent among millennials making more than $75,000 per year.
Paradoxically, iQuantifi says that millennial’s experience with debt may be driving them towards better financial behavior.
"Debts, especially student loans, are driving millennials to focus on their finances at a younger age," said Tom White, iQuantifi CEO. “Our study found a significant decrease in millennials’ average individual debt burden over just last year. We believe that this generation has been forced to tackle significant financial obstacles and is searching for financial guidance and knowledge to help them do so.”
The survey’s respondents appeared to have an appetite for financial advice, as 75 percent wish their financial institution offered more guidance and financial management tools, and 81 percent were open to using a mobile application or online tool if it provided them with comprehensive advice — that proportion climbs to 91 percent among millennials making more than $95,000 a year.
Looking back, 18.6 percent of respondents said they had switched financial institutions in the past 12 months, and 28.8 percent of those making more than $75,000 annually have done so.
Millennials are also open to starting relationships with new financial institutions. Currently, nearly 31 percent of the survey’s respondents use financial products provided by an institution that isn’t their primary bank or credit union.
The survey of 500 randomly selected Americans between the ages of 21 and 35 was conducted between Jan. 12 and Jan. 16.