While almost three quarters (72 percent) of millennials set financial goals, very few (20 percent) have a plan to achieve those goals, according to online financial adviser iQuantifi in a report released Tuesday, April 7, in partnership with MTSU.
iQuantifi, which provides comprehensive, goal-based planning advice to millennials and young families, conducted the inaugural Millennial Money Mindset Survey on the financial habits of millennials in partnership with Middle Tennessee State University’s Jones College of Business.
“Millennials’ information sources for advice and managing their finances is a blend of old school and new school consumer behavior,” said Don Roy, an MTSU marketing professor who worked on the survey. “Many millennials seek advice from trusted sources, most notably family (71 percent) and friends (45 percent), rather than from marketer-controlled information sources such as a financial adviser, website or blog.
“These behaviors reinforce the influence of word-of-mouth and the benefits of customer satisfaction as people will share their experiences, good and bad, with others.”
The survey showed that only 29 percent of millennials ages 21-34 said they have sought advice from a professional, such as a traditional financial adviser.
Millennials are interested in using online solutions to plan their futures, with 76 percent saying they would consider utilizing a free ‘app’ or online tool to accomplish their goals. Notably, only 17 percent indicated they needed to meet with a live person to be comfortable with the advice.
Debunking the myth that this generation is not thinking of their financial futures, 59 percent of respondents claimed that increasing their overall savings was a major goal for the next year, and nearly half (43 percent) of respondents indicated that they would “do whatever it takes to achieve” their financial goals.
“Millennials recognize that setting financial goals is important, but they’re grasping for ways to reach those goals because they don’t have a comprehensive plan,” said Tom White, CEO and co-founder of Nashville-based iQuantifi. “There is untapped demand for virtual financial advisers to help millennials set and achieve goals. This presents a tremendous opportunity for banks, credit unions and other institutions to attract and retain millennials by offering goal-based planning services online.”
Millennials’ top savings goals include:
- Saving for retirement (64 percent);
- Saving for a vacation (68 percent);
- Buying a car (66 percent);
- Paying down credit card debt (63 percent); and
- Saving for a house (60 percent).
Their biggest challenges include not making enough money (56 percent), staying on budget (41 percent), developing a budget or financial plan (28 percent), managing debt (27 percent) and understanding where and how to invest money (26 percent).
“It is clear that millennials are comfortable developing such trusting relationships in an online environment,” said MTSU marketing professor Tim Graeff, who also worked on the survey. “Perhaps, treating millennial customers as friends or family members might go a long way in their willingness to work with and purchase financial services and advice from financial planners.”
Interestingly, while more millennial men say they have financial goals (76 percent) than women (68 percent), millennial women are more likely to say they want to achieve their financial goals (49 percent) than men (43 percent).
For complete results from the survey click here: http://iquantifi.com/2015-millennials-money-mindset-report/.