Gen Y Investor Insights: Millennial Millionaires in the Making

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M

E
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Gen Y Investor Insights:
Millennial Millionaires in

the Making

Exploring the Mindset of Millennials
With High Net Worth and Those With

High Potential For Future Wealth

January 2015

Generation Y, also known as the Millenni
broad brush. TD Ameritrade research fin
this group, depending on current wealth

• Mass Affluent Millennials have very spe
their financial planning. The best appro
likely identifying their needs and being

• Potential High Net Worth Millennials ha
incomes. They may represent the most
because they’re mostly overlooked by f
advisor to help them reach their goals.

• High Net Worth Millennials can be influ
on the attitudes and behaviors that mad
group typically has an advisor and isn’t

ials, has typically been painted with a
nds there are distinct differences within

and level of income.

ecific goals in mind when it comes to
oach to connecting with this group is

responsive.

ave some investable assets but high
t promising target group for RIAs,
financial firms and may be looking an

uenced by advisors, but they rely more
de their parents successful. This
t looking to switch.

The Mass Affluent Millennial group is de

• Between the ages of 18 and 39*
• Have investable assets between
• And an annual household income

The Potential High Net Worth Millennial

• Between the ages of 18 and 39
• Have investable assets between
• And an annual household income

The High Net Worth Millennial group is d

• Between the ages of 18 and 39
• And have more than $500,000 w

* The Millennial generation is typically defined as those Americ
included investors born as early as 1975.

efined as those respondents:

$25,000 and $500,000
e between $50,000 and $149,999.

group is defined as those respondents:

$25,000 and $500,000
e of $150,000 or more.

defined as those respondents:

worth of investable assets.

cans born between 1980 and 1992. This survey





Millennials invest in a wide variety of assets.
to have managed accounts, options, foreign s

Stocks 10% 20% 30%
Mutual funds
Brokerage / Trading account
Certificates of Deposit

Bonds
Real Estate (excl. residence)

ETFs
Managed portfolios

Annuities
Options

Foreign stocks
Privately owned business

0%

Wealthy millennials are also more likely
stocks and privately owned businesses

High Net Worth Millennial
Potential HNW Millennials
Mass Affluent Millennials
All respondents

Q. What types of investments do you
own?
% 40% 50% 60% 70% 80%

The vast majority of Millennials are out of the
spouse or domestic partner

Living with Spouse / Partner

Single, living alone 12%
8%

15%

Single, living with family 20%
15%
6%
11%

Other 2%
3%

2%
3%

Single, living with friends 2%
3%

2%
2%

0% 10% 20%

High Net Worth Millennial Potential HNWM

Q. What is your living situation? * Numbers ma

eir parents’ house and living with a

64%
72%

61%
68%

29%

30% 40% 50% 60% 70% 80%

M Mass Affluent Millennials All Respondents

ay not add up to 100% due to rounding

Millennials are predominantly “validators”: Th
their finances, but they expect to play a signif

High Net Worth Millennial 21%

13%

Potential HNWM

15%

Mass Affluent Millennials 23
19%

All Respondents

19%

Q. Investor type based on questions about how respondents gather data an

hey may want an advisor to help manage
ficant role making decisions

66%

52%

33%

58%
3%

53%
28%

Validator Soloist Delegator

nd make investment decisions





High Net Worth Millennials by a wide margin u
Potential High Net Worth Millennials represent

40%

60% 67%

53% 47% 59%

Q19 Do you use a professional financial advisor?

use an advisor, more than other generations.
t an untapped market for advisors.

33% Yes 35%

No 65%

41% 52% Yes
No
48%

Mass Affluent Millennial Potentia
9
11
32

49 8 55

More likely to seek a More likely
different advisor their own a

Using the same financial advisor my family ha
Using the same financial advisors that my fam
Using a different financial advisor than my fam
None of these

Q25. Which of the following best applies to you? * Num

al HNWM High Net Worth
29
8 3 63
25

8

y to choose Tend to use their family’s
advisor advisor and have no
plans on changing

as always used and will stick with that advisor
mily has always used and I plan on switching
mily used

mbers may not equal 100% due to rounding

Potentials and Mass Affluents prefer adv
Worth Millennials want to work with som

13 16
24

31 55
58

6

39
32
26

Total Mass Affluent Potential High Net
Millennials Worth Millennial

Q29 When it comes to the age of your advisor, would you prefer …?

Someone your own age Someone older than y

visors who are older. More High Net
meone their own age.

21 21

38 9
21

18

29

2
59
53

31

High Net Worth Gen X Boomers
Millennial

you Someone younger No preference

High Net Worth Millennials judge their advisor
breadth of investment options. Mass Affluents

Total Mass Affluents Pote

Investment 29% 36%
returns

Easily accessible 22% 28%
17% 13%
Breadth of 14% 11%
investment 2%

options

Works for large,
well known
company

High touch service 6%

Famous / well 5% 4% 5
known in the area

Other 6% 6% 6

r’s value across many factors, including
s want strong returns and access.

ential HNW High Net Worth Boomers

36% 24% 26%

20% 21% 25%

12% 18% 19%

14% 15% 15%

8% 8% 3%

5% 11% 0%

6% 2% 13%

High Net Worth Millennials favor a range of m
advisor. Potentials and Mass Affluents prefe

Total Mass Affluents Pote

Email 69% 74%

Phone 67% 66%

In person 51% 42%

Mail 22% 19% 1

Facebook 14% 0% 8%
0% 2%
Twitter 10% 0% 3%

Blog/ 8%
Newsletter

methods for communicating with their
er e-mail or telephone.

ential HNW High Net Worth Boomers

79% 69% 61%

59% 67% 78%

44% 55% 54%

12% 34% 14%

% 37% 0%

28% 0%

21% 0%

Potential high net worth Milllennials prefer to
referrals. Wealthy Milllennials will make first c

Total Mass Affluents Po

Referral by friend or 36% 49%
colleague
21% 36%
Referral from parents or
grandparents 7% 2%

Investment conference / 5% 0%
Seminar
4% 0%
Cold Call

Advertisement

Social Media 3% 0%
3% 0%
Quoted / Featured 2% 0%
in news article 2% 0%
2% 2%
Read article or blog
by the advisor 16% 11%

TV or radio show

Community event

Other

be connected with an advisor through
contact through a variety of methods.

otential HNW High Net Worth Boomers

44% 23% 45%

20% 24% 10%

6% 11% 5%

6% 6% 4%

6% 5% 1%

0% 8% 0%

3% 7% 1%

2% 3% 0%

0% 6% 0%

2% 2% 1%

12% 5% 33%

Mass Affluent and Potential HNW Millennials w
calls quickly. High Net Worth Milllennials seek m

Total Mass Affluents Po

Returns phone calls 85% 87%
that day

Easily accessible 85% 89%
by email

Returns phone calls 67% 49%
immediately

Rely on advisor for all 49% 43%
investment decisions 46% 32%

Make own decisions,
with advisor assistance

Seek out advisors 38% 32%
for special situation 25% 11%

Accessible by
Facebook, LinkedIn,

Twitter

Not interested in 22% 6%
working with an advisor

Q29b To what extent do you agree or disagree with the following…?

want advisors to be accessible and return
more access and across more channels.

otential HNW High Net Worth Boomers

80% 89% 85%

82% 87% 84%

62% 76% 64%

41% 66% 45%

45% 61% 34%

38% 61% 16%

17% 54% 4%

20% 47% 8%





High Net Worth Millennials define financ
and overall net worth. Other Millennials a

Saving for education or retirement
Not having to depend on a job for income

Being debt free
Being able to indulge in luxury items

Paying bills on time
Leaving a substantial positive net worth

Leaving money to my heirs

High Net Worth Millennial 0

Poten

Q2. Which one of the following statements is closest to your definition of fina

cial success as leaving money to heirs
are focused on a comfortable retirement

5 10 15 20 25 30 35

ntial HNWM Mass Affluent Millennial

ancial success?

Not-yet-wealthy Millennials are more optimist

Mass Affluent Millennial I am far beh
12 be and unli
5 financial su

36 I am workin
56 financially s
not succeed

I am on my
financial su

High Net Worth Millennial I am already
1

10 Don't know
26

50 13

Q20. Which of the follow

tic than their Already-Wealthy peers

hind where I want to Potential High Net Worth
ikely to achieve Millennial
uccess
435
ng at becoming
successful but may 25
d

way to reaching
uccess

y there

64

w/ not sure

wing best describes where you are on the path to your financial success?

All Millennials cite smart investments and
Mass Affluents and Potentials also see b
Net Worth Milllennials cite family connect

Mass Affluent Millennial

Making smart investments 68%

Hard work 67%

Being frugal 52%
Education 38%
Luck 17%
14%
Good timing 14%
Good financial advisor 12%
Receiving an inheritance 10%
6%
Family connections
Owning my own business

Q30. What are the 3 biggest contributing factors to achieving wealth?

d hard work as keys to acquiring wealth.
being frugal as top factors, while High
tions and owning a business

Potential HNW High Net Worth Millennial

66% 55%

69% 53%

38% 28%

42% 33%

17% 17%

22% 20%

15% 24%

7% 20%

13% 24%

10% 23%





Projected Wealth Needed for
(on ave

Mass Affluent Millennial

Potential HNW Millennial

High Net Worth Millennial

Mass Affluent Millennial Potential

*60.8

28 21
45 2

5 23
21

*Mean Planned Retirement Age I plan on fully retiring when

Do not want to retire, do no

Want to retire, have needs t
so
Unsure

r a Comfortable Retirement
erage)

$2.92 million

$4.97 million

$4.58 million

l HNWM High Net Worth Millennial

*60.1 12 *56.8
12
55 49

28

n I'm…

ot have need to

that prevent me from doing
Q12. At what age do you plan to fully retire?

While the biggest concern for Mass Afflu
savings, there is also apprehension abo
income and health care expenses.

58%

54%

49%

26%

44%

27%

18%

Outliving your Having to work Coping with 6%
Savings longer to healthcare
expenses The expense of
supplement caring for an
income
elderly parent or
relative

All Concerns

uent Millennials is outliving their
out having to work longer to supplement

14% 14% 13%

10%

1% 3% 1%

Relying on Not being able to Having to move I am not

children or family leave an to an area with a concerned about

r for financial inheritance lower cost of any of these

support living things

Biggest Concern

Potentials mention outliving their saving
other issues are secondary.

55%

41% 39%

29%

41%

22%

12% 10%

Outliving your Having to work Coping with The expense of
Savings longer to healthcare caring for an
expenses
supplement elderly parent or
income relative

All Concerns

gs as their top tier concern overall, while

19% 16%

14% 11%

8% 6% 2%

Relying on Not being able to Having to move I am not

children or leave an to an area with a concerned about

r family for inheritance lower cost of any of these

financial support living things

Biggest Concern

High Net Worth Millennials have lower le
but “caring for an elderly parent” is rated

50%

44%

36% 38%

28%

17% 13% 18%

Outliving your Coping with Having to work The expense of H
Savings healthcare
expenses longer to caring for an

supplement elderly relative

income

All Concer

evels of retirement concerns, overall,
d higher than among other millennials.

30% 29%

24% 21%

8% 7% 9%

Having to move Relying on Not being able I am not
to area with children/family to leave an concerned
lower living for support about any of
costs inheritance to these things
heirs

rns Biggest Concern

Reducing personal debt is a major conce
High Net Worth Millennials, but not so fo
for retirement is the only top concern ra

1 Generating enough 25% 1 Saving for ret
income from my
investments to live 21% 2 Generating en
comfortably during 18% income from m
retirement 18% investments t
comfortably d
2 Saving for retirement retirement

3 Managing income and 3 Reducing pers
expenses to live within
my means

3 Reducing personal debt

Q2. Please rank the top three financial goals that are most important to you

ern among Mass Affluent and Potential
or High Net Worth Millennials. Saving
anked high by all three groups.

tirement 21% 1 Managing income and 17%
16% expenses to live within
nough my means 15%
my 14% 12%
to live 2 Saving for retirement
during
3 Developing a financial
sonal debt plan or budget

u at this stage in your life?