LONDON, Nov. 10, 2015 /PRNewswire/ -- Financial services
providers were given a stark warning about their failure to engage
with millennials in a new study by BNY Mellon and a team of
students from Cambridge Judge Business
School, University of Cambridge.
BNY Mellon, a global leader in investment management and
investment services, worked with the Cambridge team to explore millennials'
understanding of the financial choices available to them; their
educational and product needs; and their attitudes to social
finance. The report is entitled Generation Lost: Engaging
Millennials with Retirement Saving.
The report surveyed millennials (those born between 1980 and the
turn of the century) across six key markets - Australia, Brazil, Japan, the
Netherlands, the UK and the US. The researchers engaged with
a broad range of millennial populations: in emerging and emerged
markets; in countries with a collective approach to retirement and
those relying on a unit-linked system; and those with access to
compulsory and voluntary pension schemes.
The researchers found that many millennials face a less
comfortable retirement than their parents and their grandparents as
a result of demographic, political and macro-economic trends. Yet
many are unaware of the realities of the future that awaits them,
according to the report. Their lack of understanding of financial
matters appears to be as much a result of a lack of education and
information than any lack of interest.
The survey found that 46 percent of millennials do not receive
any information on financial matters through their workplace or
educational establishment. Other key findings include:
- Over half (51 percent) of millennials estimate the size of the
fund they will need for retirement by taking a "blind guess" rather
than basing it on industry data, with a further 39 percent taking
an "educated guess";
- Across all respondents, 77 percent want to be told the "stark
reality" of their post-retirement finances. However, attitudes vary
widely from country to country, only 48 percent of Brazilian
millennials want to know the "stark reality", compared to 94
percent of Australians;
- Given the choice, millennials would allocate 42 percent of
their portfolio to social finance products. However, across all
respondents, 95 percent of millennials feel that pension funds and
insurers provide limited, poor or no options for investing in
social finance products;
- Sixty-three percent would save more if their pension allowed
multiple lifetime withdrawals.
"High student debt, low job security and low global growth mean
millennials face a different set of financial challenges than the
baby boomers and Generation X," said Paul
Kelly, a graduate from Cambridge
Judge Business School and joint-lead researcher for the study. "It
is therefore crucial that financial services providers understand
how they can empower millennials to save for their
retirement."
The report offers a number of potential avenues which would
allow financial services providers such as life insurers, banks and
asset managers to reach out to millennials in new ways. "The
financial services industry needs to do more to promote financial
education by partnering with grassroots financial education
providers, engaging with schools and universities, and lobbying
national governments for change," said Sadia Cuthbert, head of Business Development at
Cambridge Judge Business School.
"Young people need regular engagement through multiple
channels if they are to be equipped to deal with the challenges
they face and provide for their own retirement."
"Without a new approach, we face a real risk that the millennial
generation will become Generation Lost – lost both to the financial
services industry and in terms of its own readiness for
retirement," adds Paul Traynor, head
of Insurance for EMEA, APAC & LatAm at BNY Mellon. "Millennials
say they want more meaningful engagement with insurers and other
financial services providers and to be told the truth about how
poor they may be in retirement if they do not start saving early.
They are ready to hear more confrontational, honest and realistic
messages about the challenges they face in providing for their
retirement."
"Responsible investment should be more actively marketed to
millennials," adds Sandra Carlisle,
head of Responsible Investment at Newton Investment Management, a
BNY Mellon investment boutique. "Just because millennials have
little understanding of responsible investment now, it doesn't mean
that they wouldn't invest in this way, given the opportunity.
Financial services companies should develop and educate millennials
on responsible investments and social finance, and make it easier
for them to allocate a percentage of their retirement savings to
this segment. An all or nothing approach will put some investors
off."
A total of 1,253 millennials were surveyed between July and
September 2015. To view the report,
please click here. The new study follows on from last year's
report, The Generation Game: saving for the new millennial, which
provoked debate on four themes: parent power; connecting the future
with the present; social media scepticism; and global challenges
and local customs.
Notes to editors:
BNY Mellon
BNY Mellon is a global investments company
dedicated to helping its clients manage and service their financial
assets throughout the investment lifecycle. Whether providing
financial services for institutions, corporations or individual
investors, BNY Mellon delivers informed investment management and
investment services in 35 countries and more than 100 markets. As
of Sept. 30, 2015, BNY Mellon had
$28.5 trillion in assets under
custody and/or administration, and $1.6
trillion in assets under management. BNY Mellon can act as a
single point of contact for clients looking to create, trade, hold,
manage, service, distribute or restructure investments. BNY Mellon
is the corporate brand of The Bank of New York Mellon Corporation
(NYSE: BK). Additional information is available on
www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our
newsroom at www.bnymellon.com/newsroom for the latest company
news.
BNY Mellon offers a wide range of social finance products and
services that help mainstream investors meet their return/risk
goals, while considering the environmental, social and governance
(ESG) impact of their investments. Learn more about social finance
at BNY Mellon at www.bnymellon.com/socialfinance.
Cambridge Judge Business School,
University of
Cambridge
Cambridge Judge
Business School leverages the power of academia for real world
impact to transform individuals, organisations and society. Since
1990, Cambridge Judge has forged a
reputation as a centre of rigorous thinking and high-impact
transformative education, situated within one of the world's most
prestigious research universities, and in the heart of the
Cambridge Cluster, the most successful technology entrepreneurship
cluster in Europe. The School
works with every student and partner or client organisation at a
deep level, identifying important problems and questions,
challenging and coaching people to find answers, and creating new
knowledge. www.jbs.cam.ac.uk/
Newton
Newton is a global investment management
subsidiary of The Bank of New York Mellon Corporation. With assets
under management of $68.4 billion (as
at 30 September 2015), which may
include assets managed by Newton's officers as dual officers or
employees of The Bank of New York Mellon and assets of wrap fee
accounts, Newton's group of affiliated companies provides
investment products and services to a wide range of clients,
including pension plans, endowments and foundations, corporations
and (via BNY Mellon) individuals. News and other information about
Newton is available at www.newton.co.uk/us-institutional/ and via
Twitter: @NewtonIM
Contact:
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Malcolm
Borthwick
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Charles
Goldsmith
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BNY
Mellon
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Cambridge Judge
Business School
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+44 (0) 20 7163 4109
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+44 (0)1223339608
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malcolm.borthwick@bnymellon.com
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c.goldsmith@jbs.cam.ac.uk
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This press release is issued by The Bank of New
York Mellon to members of the financial press and media.
All information and figures source BNY Mellon
unless otherwise stated as of September 30,
2015.
The Bank of New York Mellon, London Branch, registered in England and Wales with FC005522 and BR000818.
Branch office: One Canada
Square, London E14 5AL. The
Bank of New York Mellon is supervised and regulated by the
New York State Department of
Financial Services and the Federal Reserve and authorised by the
Prudential Regulation Authority.
The Bank of New York Mellon London branch is
subject to regulation by the Financial Conduct Authority and
limited regulation by the Prudential Regulation Authority.
Details about the extent of our regulation by the
Prudential Regulation Authority are available from us on
request.
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SOURCE BNY Mellon