Data & Research April 27, 2016

Majority of Millennials Receive Financial Support From Parents

The younger generation wants help with financial planning and investing, but tends to rely on friends and family for advice rather than working with an adviser.
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Seventy-four percent of Millennials receive financial support from their parents, according to UBS Wealth Management Americas’ quarterly UBS Investor Watch report, “The Ties That Bind.” 

The report, which examines how Baby Boomers and their Millennial children are redefining family and finances, found that Boomer parents are overwhelmingly positive about their ability to help their children financially. A majority (80%) say they feel good about providing financial support, while only 10% say they withhold it to teach adult children financial responsibility. However, 52% of Millennials feel shame, frustration or guilt about accepting assistance from their parents.

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The type of financial support can include health insurance (29%), home buying/renting (28%), auto insurance (26%) and utilities (23%), though Millennials receive funding for vacations (19%) and spending money (21%) as well.

The study also finds that Millennials are almost twice as likely to move home after college as their parents were, mainly to save money (39%). Some also say they move back for convenience (27%) or to achieve job stability first (26%). But some live with their parents because they want to: 24% of Millennials prefer to live with their parents, while 22% say their parents wanted them to stay. Twenty-one percent say they live with their parents to pay down debt. 

NEXT: Generational differences in financial planning

When it comes to finances, a majority of Millennials (73%) tend to focus on short-term needs and goals, such as homes and travel, believing retirement is too far away to worry about. Over half of Millennials with retirement accounts have or would consider dipping into them to make a large purchase, and 25% have already withdrawn funds. Only 13% of Boomers, on the other hand, have withdrawn retirement money.

Millennials have not followed their parents’ investment behaviors; most would rather time the market, while Boomers typically believe in “buy and hold.” Millennials are also more inclined to trust their gut when it comes to investing (32% vs. 14% of Boomers), but both generations would rather follow a plan. On average, Millennials hold twice as much cash as Boomers (47% of assets vs. 20% for Boomers). However, they do not appear to feel safer or more content with their finances: Only 29% are happy with their portfolios, compared with 78% of Boomers.

Millennials say they want advice on a range of topics including financial planning (71%), investing (70%), budgeting (63%), insurance (61%), mortgage (60%), children’s college savings (59%) and debt management (55%). Most Millennials say they are interested in working with an adviser, but only one-third currently do so while the rest rely on friends and family. Three-quarters of Millennials would consider using their parents’ adviser.

The full report is available here.
Products April 26, 2016

Cetera Launches Platform for Navigating Fiduciary Rule

The tools and resources are designed to help advisers succeed in the regulatory environment created by the finalized DOL fiduciary rule.
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Cetera Financial Group has launched DOL DynamIQs, a suite of tools and resources designed to enable financial advisers to prepare for and thrive in the regulatory environment created by the Department of Labor’s (DOL) fiduciary rule.

The recently finalized DOL rule expands the definition of fiduciary under the Employee Retirement Income Security Act (ERISA), which now applies to all financial advisers who work with qualified retirement accounts and IRAs. Cetera designed the DOL DynamIQs platform to help the network’s advisers understand how the new rule may affect their business.

The platform, available at no additional cost to all advisers in the Cetera network, helps advisers gauge their readiness and develop a game plan to achieve DOL compliance through the iQuantify tool. The introduction of iQuantify will follow a pilot program for Cetera advisers across the country. In addition, the new platform includes an online assessment tool that lets advisers quickly identify the assets and accounts in their practices that may be affected by the DOL’s new rule; a tool that provides advisers in-depth analysis of their businesses and a transition plan for client portfolios not in compliance with the DOL fiduciary rule; a consulting service that will provide advisers ongoing access to specialists who can help them transition client assets to DOL-compliant solutions; and in-depth analysis of the regulation and its implications, combined with educational materials and webcasts describing the rule and how advisers can successfully adapt.

The tools provided within the DOL DynamIQs program are fully integrated with Cetera’s Pentameter practice management platform, its Connect2Clients adviser marketing communications support platform and its “90 in 90” adviser transitions platform.

“Cetera and its advisers have always emphasized the importance of putting clients’ best interests first, and we support efforts to further this crucial goal,” says Adam Antoniades, president of Cetera Financial Group. “The Department of Labor’s new regulatory framework is expected to significantly impact the independent adviser business model and will undoubtedly result in substantial changes in compliance and business processes. Financial advisers who work with retirement accounts on any level need to know that their broker-dealer has the in-house expertise and resources to help them identify and cope with the potential impact to their businesses.”

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