While 15% of them define risk as simply losing money, just 12% of millennials define risk as a failure to meet their financial goals.
While 69% of the millennial respondents said they are comfortable taking risks to get ahead, 75% would choose capital preservation over outperformance as an investment objective.
Millennials Want Capitalism to Better the World
Millennials have long been thought of as major proponents of ESG investing, or allocating their assets in line with certain beliefs on the environment, social responsibility and corporate governance. Natixis found that 76% of North American millennials think of investing as a way to make positive impacts in the world.
However, just four-in-10 of these respondents have investments incorporating ESG factors.
“Millennials are stereotyped as having a lot of interest in activism, but when we speak to them they still have return expectations and they want to do well with their investments,” said Goodsell. “For a significant number of millennials, ESG is simply a better, less risky way to invest. It’s not necessarily about saving the world or expanding opportunities.”
While millennials feel responsibility to address big issues in the world, more believe that that responsibility lies chiefly with companies and governments, according to the survey.
Millennials Are Already Worried About Retirement
North American millennials, on average, hope to retire by the age of 59, according to the survey, which means they are increasingly sensitive to certain types of risks.
The biggest risk biting millennials right now is inflation, said Goodsell.
“They have this sense of doom, even though they think they should be financially secure in retirement. We see people saving 19% of their income who already have $250,000 saved away,” said Goodsell. “They’re looking at the world and how it is structured and have a strong desire to retire early, but they also acknowledge that they will likely have to work longer.”
The respondents named the need to delay retirement, rising healthcare costs and a lack of financial security as concerns as they move towards retirement age.
Millennials Were Hit Hard By Covid-19
According to the survey, nearly half of the millennial North American respondents, 47%, said they felt stressed about financial security during the pandemic.
“This survey covered people more affluent than the global average, and we still found that one-in-four respondents suffered a serious financial setback because of the pandemic,” said Goodsell. “Part of it is timing, I wouldn’t discount the increasing complications of life as this generation ages. If they made a mistake when they had $10,000 in assets, they felt like they had time to make up for it. Now, with $100,000 or $250,000 in assets, mistakes are costlier and there’s less time to recover.”
On the brighter side, these respondents also said that the pandemic reinforced certain financial lessons like keeping an emergency savings account, limiting their spending and crafting an estate plan.