Millennials want very little – if any – part of the financial services industry. They don’t want companies connecting with them via social media and are more than twice as likely to ask parents for financial advice than they are to ask banks.
A new study by BNY Mellon and a team of undergraduates from Said Business School, University of Oxford, The Generation Game: Savings for the New Millennial, looked at millennials’ (born after 1980) saving priorities, how they regarded retirement planning, and how they feel about different kinds of financial institutions.
While the results varied from country to country — the study spanned Australia, Brazil, China, Japan, the Netherlands, the U.K. and the U.S. — the results were striking.
Although millennials will have to make up for the loss of retirement provisions from both public and private employers and put more money away for a longer time than their parents, 49 percent of them don’t understand how pensions work.
That should provide an opportunity for financial institutions to step in with explanations, but millennials are not inclined to listen. Less than one percent of millennials want financial services providers to connect with them via social media.
Shayantan Rahman, studying economics and management at SaidBusinessSchool, who is student lead for the research, said in a statement, “What struck me is that while millennials are generally comfortable about being targeted by consumer brands through social media, they do not want financial services providers using these channels to contact them. Rather than being the solution for helping insurers engage with millennials, many told us they think it makes them look ‘silly,’ ‘pally’ or ‘creepy.’”
Millennials definitely don’t have all the answers when it comes to retirement, and the depth — or lack thereof — of their knowledge varies widely from country to country. Among Brazil’s millennials, 84 percent aren’t aware of the tax efficiencies pension savings offer, compared to 42 percent in the Netherlands. In Japan, only 16 percent of millennials believe they will be able to access the same sources of retirement income as their parents, compared to 84 percent in Australia.
Millennials overall just don’t see the advantages of putting money away for retirement, with 59 percent believing they haven’t seen products targeted at people like them.
“This study of millennials by millennials reveals the disconnect that the financial services industry has with this generation,” said Janet Smart, undergraduate course director at SaidBusinessSchool. “The challenge for insurers is to find new ways to engage millennials, so as to improve their level of financial understanding and build their commitment to retirement planning.”