IN QUEST FOR MILLENNIALS, FINANCIAL FIRMS TRY TO ‘CRACK THE CODE’
Bringing generation’s prime earning years into fold is mission
To get Millennials excited about investing, Wall Street is following their wish lists: It’s offering socially conscious “Clean and Green” funds, apps that let them buy stock with spare change, robot-driven portfolios and chatty, bite-size articles on handling money.
Why all the attention on Millennials’ investing habits, or lack of them? Because this group of digitally savvy people in their 20s to mid-30s is entering its prime earning years. And as America’s biggest generation, they represent a financial bonanza for investment companies — with a global net worth that could climb as high as $24 trillion by 2020, according to consulting firm Deloitte.
That’s a lot of future cash available to plow into markets.
Wall Street is targeting investors such as Sydney Teng, 24, a 2015 college graduate just starting her career. She is saving for retirement using a 401(k) plan offered by her employer, Evergreen Health Care in Baltimore. She’s setting aside 6% of her roughly $50,000 salary and understands saving for retirement “is a long-term game.”
Teng invests in a target-date fund, which automatically determines her mix of invest- ments based on her retirement in 2060. These popular funds start out aggressively with sizable stock holdings but get more conservative as retirement approaches. Teng ’s 401(k) is now 90% stocks. Still, she admits she is not totally comfortable with them.
“Part of me is a little bit afraid,” Teng said. “I don’t like to lose money. My current account balance is chump change in the scheme of things, but I don’t want to part with it.”
Getting Millennials to start investing isn’t easy, even though most (85%) say saving for retire- ment is an “important part” of becoming a “financial adult,” a Wells Fargo study says.
“Every financial planner, investment adviser and financialservices company is asking: ‘How do we crack the code needed to get the next generation of investors,’ ” said Avi Lele, CEO of Stockpile, a firm that caters to young investors and pioneered the use of gift cards to buy stocks with as little as $25.
The market crash in 2008