Myth 2: Income and debt are the key barriers to investing. While income and debt are important, 39 percent of millennials without taxable investment accounts state that not having enough knowledge about investing is also an important barrier.
Myth 3: Millennials are overconfident in general, so they are probably overconfident about investing. Far from being overconfident, only 21 percent of non-investing millennials and millennials with only retirement accounts are very or extremely confident about making investment decisions. This figure increases to 47 percent for millennials with taxable accounts.
Myth 4: Millennials are skeptical of the financial services industry and by extension, financial professionals. Nearly three quarters (72 percent) of millennials working with a financial professional are very or extremely satisfied with their financial professional. Only 15 percent of millennials not working with a financial professional cite lack of trust as a reason.
Myth 5: Millennials overestimate the investable assets needed to work with financial professionals. In fact, millennials underestimate the investable assets needed to work with a typical financial professional. Twenty percent of millennials believe there is no minimum amount needed to work with a financial professional. About six in 10 believe a financial professional would work with them if they had $10,000 or less to invest. Millennials also lack guideposts for pricing financial advice. Forty-two percent of millennials do not know what financial professionals charge for their services. When asked to estimate, they guess high: 77 percent believe financial professionals charge 5 percent or more of assets under management.
Myth 6: Millennials gravitate toward electronic communication and robo-advisors. Despite their affinity for technology, 58 percent of millennials prefer to work face to face with a financial professional, on par with baby boomers (60 percent) and Gen Xers (58 percent). Only 16 percent of millennials show strong interest in using robo-advisors.
Myth 7: Millennials are all the same and have similar investing attitudes and behaviors. Advisors should not think of millennials as a monolithic entity. For example, urban millennials are 50 percent more likely than rural millennials to own taxable investment accounts. Thirty-three percent of male millennials are extremely or very confident in their financial decision-making, compared to only 23 percent of female millennials. Twenty-eight percent of white millennials have taxable accounts compared with 20 percent of African-American millennials.
The findings should help interested advisors begin to decode the elusive millennial generation. "Investment professionals who take time to demonstrate that client interests are paramount can expect to earn the trust of millennial clients," said Forfang.