NEW YORK, July 20, 2016 /PRNewswire/ — Global X, the New York-based provider of exchange-traded funds (ETFs), recently conducted a High Net Worth Investors Study of Generation X and Millennial investors (http://www.globalxfunds.com/investor-survey-a-look-into-tomorrows-assets/) and found several distinctions between and within each group’s understanding of investing and their approaches to saving. The survey found that Gen Xers could be best broken down into two groups described as “Cautious Consulters” and Knowledgeable Xs,” while the Millennials also fell into two cohorts, “The Builders” and “Adrenaline Techies” based on their investment styles. Overall, the Global X Survey found that investment behavior was not uniform across asset levels or age groups.
Millennials with $100,000-$250,000 in investable assets are defined as “The Builders” as they have just begun to save and invest. They are not as likely to use professional financial services as the other investor groups; the survey found they are 30% less likely to use an advisor and 49% less likely to get financial information from an advisor. Savings are not a major part of their financial plans just yet, as they are 26% less likely to have a plan to save for their children’s education.
The wealthier Millennial group – aged 21-36 with over $250,000 in individual investable assets — is best described as “Adrenaline Techies” with a preference to utilize roboadvisors, consume information via apps and podcasts, and trade frequently. They are 136% more likely to use robos and apps than the other groups polled, and 125% more likely to trade at least 10 times a month. They have a favorable view of ETFs, as they are 38% more likely to find ETFs appealing and 43% more likely to consider smart beta ETFs in a portfolio. They are 28% more likely to grow a nest egg.
The “Cautious Consulters” group — Gen Xers aged 37-48 with $100,000-$500,000 in individual investable assets — are more likely to use a financial advisor, trade infrequently, and save for retirement and less likely to invest for pleasure or short-term purchases. They also are less familiar with specific investment types, suggesting they may want to seek the advice of an advisor to guide their portfolios. In fact, they are 33% more likely to use a broker/advisor as compared to the rest of the survey population. They are also 38% likelier to save for retirement, and 55% less likely to trade as a hobby, reflecting their cautious nature.
The wealthier Gen Xers are crowned “Knowledgeable Xs” because they have a greater understanding of various investment vehicles than the other groups surveyed and yet they are more likely to use advisors. This group, with over $500,000 in individual investable assets, is 45% less likely to use a roboadvisor or investment app, and is 17% more likely to get information from their advisor. Their knowledge of investment products surpasses others as they are 15% more likely to be knowledgeable about ETFs and 12% more likely to have knowledge about smart beta ETFs.
“We believe this survey can serve as a helpful guide for many financial advisors who seek to better understand their future potential clients and what makes them tick. Although it is important to recognize that one investor could be very different from another, we found that there are key commonalities when grouping investors by age and wealth bracket. While ‘The Builders’ and ‘Adrenaline Techies’ are both technically considered Millennial investors, understanding their behavioral nuances are essential for an advisor seeking to help an investor better save for his or her future,” said Jay Jacobs, director of research at Global X.
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SOURCE Global X Management Company, LLC