Young Affluent Investors More Concerned about Financial Future

In its semi-annual Affluent Insights survey, Merrill Lynch found younger affluent investors (between the ages of 18 and 34) are much more concerned about their financial security than those over 35.  

The affluent investors included in Merrill Lynch’s survey have investable assets of $250,000 or more. Those investors between the ages of 18 and 34 are substantially more concerned about every financial topic than those over 35: 99% of 18-34 year olds are concerned about the rising cost of college, whereas 41% of the over-35 pool is concerned. Ninety-four percent of the younger pool is concerned about having their retirement assets last their lifetimes, versus 63% of the older pool, and 76% of the younger pool is concerned about maintaining their lifestyle in retirement, versus 52% of the older pool.

The Affluent Insights survey also found that half (49%) of respondents meet with two or more financial advisers before choosing one to work with, and 38% interviewed three or more.  When asked why they selected their adviser, taking the time to get to know them and their needs was the most common response (60%), followed by:

  • Accessibility, 49% 
  • Was referred to them, 48% 
  • Good personality, 47% 
  • Offers a wide variety of banking and investment solutions, 46% 
  • Solid track record of investment returns, 43% 
  • Experience with similar clients to them, 42% 

Additionally, 78% of affluent investors speak with their financial adviser at least quarterly, men slightly more frequently than women, according to Merrill.  Fifty-seven percent of affluent investors have been working with their financial adviser for 6 years or more; with women being particularly loyal – 71% of women have been with their adviser for six or more years, versus 43% of men.  

Life Lessons Prioritized                             

Merrill Lynch’s Affluent Insights survey also asked respondents for which life lessons they consider to be the most important to pass on to their children. Financial know-how was the most common response (48%), followed by choosing the right spouse/partner (36%), choosing the right career path (24%), or staying physically fit (17%).

As nearly half of respondents deem financial know-how to be the most important life lesson to pass on, it is not surprising that parents are teaching their children about money at a younger age than ever before – 57% of parents speak to their kids about money before they are 12 years old, and 85% before their kids are 18.  Compared to a generation ago, when 42% of parents over the age of 65 spoke with their children about financial matters at a young age, compared to 76% of parents today ages 35 and 50.

Among parents who work with a financial adviser, 64% have shared with their children some form of advice they received. Such advice includes: investing for retirement at an early stage in life (47%), the importance of managing a budget (40%), managing a checking/savings account (29%), or knowing how to pay down and manage debt (26%).

The Affluent Insights survey was conducted via phone from June 6-21, 2011. It included a national sample of 1,000 individuals with investable assets of $250,000 or more, in addition to an oversample of 300 affluent respondents in five target markets (Atlanta, Boston, Chicago, Los Angeles, and San Francisco).