The wealth manager’s latest report suggests millennials are more conservative, but are also the heaviest generational user of robo advisors.
A survey commissioned by BMO Wealth Management for its latest report asked millennials, Generation X-ers and baby boomers about their attitudes towards saving and investing.
As a result of the impact of the financial crisis, millennials are resorting to the same “fiscally conservative” attitude as their grandparents, with a strong preference for saving versus investing. Baby boomers, on the other hand, have a greater confidence in their investments in the long run.
When asked about the financial goals they are saving and investing for, retirement proved the most popular answer, coming in at 53 per cent of all individuals surveyed.
However when split by generation, millennials were the least likely to be saving and investing for a pension as a top priority (32 per cent). Baby boomers valued retirement the most (63 per cent), with Gen X-ers coming in just one per cent lower.
Commenting on the data, Tania Slade, national head of wealth planning at BMO Wealth Management (U.S.) said: “It's reassuring to know that all generations recognize the importance of saving for retirement and consider it a top financial priority.”
Additionally, respondents in every generation indicated a preference for using a portfolio approach as their top method for investing.
The majority of those surveyed choose to work with the assistance of a financial professional: 33 per cent using an advisor at a financial institution, 22 per cent investing through an independent advisor, and 15 per cent investing with a full-service financial professional.
Slade continued: “Working with a financial advisor who has specialized expertise in advising people at different stages in their lives can go a long way toward maximizing your retirement income. But even without the aid of an advisor, simply beginning to save for retirement as early as possible is a terrific first step."
The use of robo advisors for investing was more common among millennials (16 per cent) than generation-Xers (7 per cent) and baby boomers (6 per cent).
Respondents who neither save nor invest also demonstrated a big generational gap in their reasoning, where 12 per cent of millennials are worried about losing money, compared to only 7 per cent of baby boomers.
Almost 1 in 5 millennials said investing was too complicated (17 per cent), more than double than the rate of baby boomers (8 per cent).