Time is not on the side of America’s older generation with regard to living comfortably in their twilight years. New research from Mintel reveals that those near or already in retirement may not have enough set aside to carry them comfortably through as just over two-fifths (42 percent) of Baby Boomers (aged 53-71) report having less than $100,000 in investable assets* and one quarter (27 percent) have less than $25,000. Despite this, however, nearly six in 10 (59 percent) Baby Boomers agree that they are confident they will have enough saved for retirement.

Resting easy are the 68 percent of Millennials (aged 23-40) who also agree they are confident they will have enough saved for retirement. What’s more, this cohort appears to have a positive outlook for a bright future as Millennials (66 percent) are more likely to be optimistic about the return on their investments this year than in 2016 (vs 43 percent of Generation X (aged 41-52) and 32 percent of Baby Boomers).

“The first Baby Boomers are turning 71 in 2017 and as they retire, more are in the decumulation stage rather than the accumulation stage. This changes the role of the financial adviser from providing investment advice to providing income distribution advice, helping retirees manage their money so they will have enough to provide the lifestyle they want,” said Robyn Kaiserman, Senior Financial Services Analyst at Mintel. “At the same time, younger consumers are beginning their financial lives, indicating that advisers may have to change their focus as Millennials tend to be more concerned with getting advice on managing money and saving for retirement than on making money.”

14% of Baby Boomers say they don’t really need a retirement account

While the majority of Americans (58 percent) report currently having an investment account of some kind** – and nearly half (47 percent) have a retirement account – those who do not are most likely to say a lack of funds is the reason why (38 percent), including 40 percent of consumers aged 55+. In fact, three in 20 (14 percent) Baby Boomers say they don’t really need a retirement account.

In addition to a perceived lack of funds, consumers say they do not currently have an investment account because they do not want to risk losing money (16 percent) and because they do not know enough about investing (16 percent), including over one quarter (28 percent) of 18-24 year-olds. Mintel research indicates that educating young people about investing could be the key to getting them involved as 38 percent of consumers aged 18-24 agree that they would invest more if they understood investing better.

“Investment education for America’s younger generations is key as they express interest in investing but only if they can do it intelligently. Institutions that provide learning opportunities to young people, whether through web content aimed at inexperienced investors, seminars and webinars designed to teach investment basics or YouTube videos that can be watched on smartphones, may have the advantage when it comes to attracting young investors. Our research shows that operators that can find a way to get young people interested in investing – and then help them be successful at it – will build a loyal and trusting client base that may remain for years,” Kaiserman continued.

While just 7 percent of US investors claim to use a robo-adviser to help make investment decisions, robo-advisers seem to be gaining traction with younger consumers as usage rises to 14 percent of consumers aged 18-34 and 17 percent of men aged 18-34. Millennial investors are also significantly more likely to believe advice from robo-advisers is just as good as advice from a human adviser (56 percent), as compared to nearly one third (30 percent) of consumers overall. Mintel’s 2017 Financial Services Marketing Trend “Is Anybody Out There?” highlights that there is still a significant appetite for human interaction in financial services, even while banking is becoming more autonomous and mobile-centric.

“The robo-adviser trend continues to disrupt the investment industry and force all advisory segments to rethink their strategies. Mintel research indicates that while relatively few investors overall currently use robo-advisers, the typically low cost compared to a human adviser makes them an attractive alternative for younger consumers, especially younger men. However, the small advantage robo-advisers have when it comes to cost is still far outweighed by the advantages most investors believe humans have over robo-advisers. It may be that some of these concerns will be alleviated over time and with investor experience; but for now, robo-advisers still have much to prove,” concluded Kaiserman.

*Excluding the value of primary residence
**eg IRA, employer-sponsored 401k or 403b

Press copies of Mintel’s Investment Trends US 2017 report and interviews with Robyn Kaiserman, Senior Financial Services Analyst, are available on request from the press office.

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