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1Copyright © 2015 The Nielsen Company
M i l l e n n i a l s i n 2015:F i n a n c i a l D e e p D i v e
2 Millennials in 2015: FinanCial Deep Dive2
Millennials in 2015: Financial Deep DiveDiversity, self-expression and optimism define the Millennial generation.
As a group, this young generation is more racially and ethnically diverse
than any that came before it. Millennials are fueling an urban revolution,
on the hunt for the vibrant, creative energy that cities have to offer, all
of which resides right outside their doorstep. They value self-expression
and artistic pursuits. They also place a premium on authenticity–from
the products they buy to brands they choose to engage with.
After enduring the Great Recession, Millennials are cautious bankers,
wary of traditional financial and investment strategies. They want
an open, transparent and authentic relationship with their financial
institution. As a generation of consumers who define themselves by
their use of technology, many Millennials have taken a DIY approach
to their finances, relying heavily on mobile and online banking options
to manage their finances. Contrary to popular belief, Millennials are
savers rather than spenders. And when we look at the different types of
Millennial consumers, Upscale Millennials are more likely to engage in
financial planning and saving than their generation as a whole. These
young, affluent consumers earn more than $75,000 each year and
represent a strong pocket of opportunity for financial institutions.
3Copyright © 2015 The Nielsen Company 3
Millennials–striving, OptiMistic & authenticToday, there are more Millennials (those born between 1977 and 1995) than Baby Boomers. They are 77 million strong and make up 24% of the U.S. population. Just two years ago, Millennials and Boomers were on equal footing, each representing 24%. Now Millennials begin to stake a slight lead in population.
U.S. Generation DiStribUtion
27%
24%16%
23%
10%
GEN Z GEN XMILLENNIALS BOOMERS SILENT
nielSen Generation DefinitionS:• GREATEST/SILENT GENERATION (pRE-1945) AGE 70+• BABy BOOMERS (1946-1964) AGE 51-69• GENERATION X (1965-1976) AGE 39-50• MILLENNIALS (1977-1995) AGE 21-38• GENERATION Z (1996-pRESENT) UNdER AGE 21
Source: Nielsen Pop-Facts 2015
4 Millennials in 2015: FinanCial Deep Dive
Millennials have been hard hit by the recent turbulence in the economy.
They have experienced high unemployment, and many have high student
loan debt. They watched their parents and grandparents struggle with
investment losses during the Great Recession, which has left them with
low confidence in the stock market and traditional financial services.
However, Millennials’ high education levels and optimism foreshadow
their future success.
According to the second-quarter 2015 Nielsen Consumer Confidence
Report, roughly 70% of Millennials believe their personal finances will
be either good or excellent in the next year, yet 55% still feel like the U.S.
is in an economic recession. This makes Millennials cautious spenders
and savers. After covering their living expenses, Millennials are most
likely to put money into savings. Millennials are more than twice as
likely as the average consumer to have student loan debt, and roughly
26% of Millennials use their extra money to pay off these debts. Despite
improvement in economic conditions across the nation in recent
months, about one-quarter (23%) of Millennials do not have any extra
money after payday.
Source: Nielsen Consumer Confidence Report, Q2 2015
MillennialS DiScretionary SpenD
once yoU have covereD yoUr eSSential livinG expenSeS, which of the followinG StateMentS beSt DeScribeS what yoU Do with yoUr Spare caSh
pUTTING INTO SAVINGS
NEw CLOThES
pAyING Off dEBT/CREdIT CARdS/LOANS
hOLIdAyS/VACATIONS
I hAVE NO SpARE CASh
NEw TEChNOLOGy pROdUCTS
OUT-Of-hOME ENTERTAINMENT
hOME IMpROVEMENT/dECORATING
RETIREMENT fUNd
INVESTINGS IN ShARES Of STOCk/MUTUAL fUNdS
42%
35%
26%
24%
23%
23%
21%
16%
11%
11%
5Copyright © 2015 The Nielsen Company
Control, transparency and personalization are vital for Millennials. They
prefer to do their own financial research rather than relying on others for
information. They also want the ability to customize their financial plan
to their specific lifestyle, and they’re more likely than older generations
to incorporate technology into their financial planning experience. By
allowing for small-scale, DIY investments, mobile apps like Betterment
and Acorns give Millennials a place to start their financial journeys.
Source: Nielsen Pop-Facts 2015
upscale Millennials- prOsperOus anD On the riseEconomic struggles are a reality for many Millennials, but the upscale Millennial subset is thriving. Roughly 27% of Millennials fall into this category, with household incomes of more than $75,000, 15% of this group earn more than $100,000. In addition to their high income, upscale Millennials have amassed significantly more wealth than their generation as a whole. The median liquid wealth value (income producing assets; IPA) for upscale Millennials is $157,500, more than 11 times the median IPA of their generation as a whole. Appealing to the distinct wants and needs of upscale Millennials is vital in capturing this lucrative segment for the long term as these consumers continue to advance in their careers.
Millennials by incOMe tOtal u.s. by incOMe
27.8%15.4%
26.6%18.7%
11.4%
UNdER $25,000 $25,000-$50,000 $50,000-$75,000
$75,000-$100,000 $100,000+
23.5%22.8%
23.9%17.8%
12.0%
6 Millennials in 2015: FinanCial Deep Dive
Millennials by the nuMbers
TOTAL MILLENNIALS: UpSCALE MILLENNIALS (hh INCOME $75k+):
Median Household Income $48,797 $109,818
Presence of Kids 57% with kids 57% with Kids
Race/Ethnicity74% Caucasian, 21% Hispanic,
14% African-American, 4% Asian-Americans78% Caucasian, 15% Hispanic, 9% African-American,
6% Asian-Americans
Homeownership 47% Homeowners 68% Homeowners
Home Type57% Single Family Home,
23% Apartment, 9% Townhome, 3% Condo
72% Single Family Home, 12% Apartment, 8% Townhome, 4% Condo
Education30% College Graduates,
11% Post-Grad Work51% College Graduates, 21% Post-Grad work
Source: Nielsen Scarborough 2015
MeDian incoMe proDUcinG aSSetS (ipa)
UpSCALE MILLENNIALS
TOTAL MILLENNIALS
GENERAL pOpULATION
$157,500
$13,875
$25,600
Source: Nielsen Financial Track 2015
Upscale Millennials lead more established lifestyles than their
generation as whole, as they’re more likely to be married, well-educated
homeowners. On the other hand, life for the Millennial generation as a
whole tends to be in flux, as 29% say they plan to look for a new job and
18% plan to move in the next year.
7Copyright © 2015 The Nielsen Company
Upscale Millennials are actively engaged in saving for the future.
According to Nielsen Financial Track, these consumers are more than
twice as likely as the average consumer to have variable-rate interest
money market accounts and CD accounts. Upscale Millennials are also
actively saving for retirement, as they are 60% more likely than the
average consumer to have an IRA and 87% more likely than the average
consumer to have a 401(k) plan. These traditional financial products
are not the only options for upscale Millennials, however. They also use
alternative financial services like prepaid debit cards and P2P payment
services.
While Millennials like to have personal control over their finances, they
also rely on professionals for investment advice. Upscale Millennials
are almost four times more likely than the average consumer to use
a financial advisor. However, according to research from the Luxury
Institute, Millennials are adopting different investment strategies than
older generations. While Gen X and Boomers tend to prefer full-service
brokerage firms, Millennials opt for independent financial advisors. After
their experience in the Great Recession, Millennials tend to trust full-
service brokerage firms less than older generations. The personalized,
individual approach of an independent financial advisor is appealing to
Millennials.
When it comes to Millennial financial preferences, the bank branch is
not dead. Roughly 85% of Millennials and 89% of upscale Millennials
say they’ve visited a traditional branch within the last 90 days. But the
bank branch doesn’t meet all the needs of upscale Millennials, as they’re
much more likely than the average consumer to use alternative branches
(within grocery stores for example) and call into customer service.
Millennials, especially upscale Millennials, want variety and options in
how they interact with their financial institutions. They want to use the
channel that best serves their needs in the moment.
Upscale Millennials are 60% more likely than the
average consumer to have an IRA and 87% more likely
than the average consumer to have a 401(k) plan.
8 Millennials in 2015: FinanCial Deep Dive
It’s no secret that Millennials are active and engaged technology users. About 92% of Millennials own smartphones and roughly 61% own tablets. Millennials are more likely than the average consumer to bank on their PCs, smartphones and tablets, especially when making trades, opening new accounts, conducting research and making remote deposits. Upscale Millennials are even more likely than their generation as a whole to use technology to conduct their primary banking activities, like making deposits and transfers, and checking their balances or setting up alerts.
Source: Nielsen Financial Track 2015
the branch Still MatterS for MillennialS
85
6171
4153
60 6254 54
30 30 29
714
26
1217
25
50
85 89
ATM SERVICES
TRAdITIONAL BRANCh
ALTERNATIVE BRANCh
TELLER SERVICES
dRIVE-ThRU SERVICES
fINANCIAL AdVISOR
CUSTOMER SERVICE
GENERAL pOpULATION UpSCALE MILLENNIALS TOTAL MILLENNIALS
percent inDicatinG they USeD Service within laSt 90 DayS
pER
CEN
T
9Copyright © 2015 The Nielsen Company
Source: Nielsen Financial Track 2015, Index where 100 = average U.S. consumer
MillennialS & online bankinG
MillennialS & Mobile bankinG
MillennialS & tablet bankinG
92
177
144184 193
315
178259 279
562
318
636
226
330230
381
173223
267216
267 277
451
303
506
270 248
436
185
92 93
103 104 105161
257227
333
150198 190
299
REVIEw STATEMENTS,
BALANCE, BILLS
REVIEw STATEMENTS,
BALANCE, BILLS
REVIEw STATEMENTS,
BALANCE, BILLS
pAy BILLS
pAy BILLS
pAy BILLS
TRANSfER BALANCES
TRANSfER BALANCES
TRANSfER BALANCES
MAkE TRAdES
MAkE TRAdES
MAkE TRAdES
OpEN A NEw
ACCOUNT
OpEN A NEw
ACCOUNT
OpEN A NEw
ACCOUNT
RESEARChEd fINANCIALpROdUCTS
RESEARChEd fINANCIALpROdUCTS
RESEARChEd fINANCIALpROdUCTS
MAkE A REMOTE dEpOSIT
MAkE A REMOTE dEpOSIT
MAkE A REMOTE dEpOSIT
400
400
400
500
600
600
800
300
300
200
200
200
100
0
0
100
0
TOTAL MILLENNIALS UpSCALE MILLENNIALS
INd
EXIN
dEX
INd
EX
10 Millennials in 2015: FinanCial Deep Dive
What DOes it all Mean?Millennials have reached critical mass and are too large to ignore. The experience of the Great Recession has made Millennials cautious bankers, wary of traditional financial and investment strategies. Millennials want open, transparent and authentic relationships with their financial institutions. Focusing on these key elements will help financial institutions engage with Millennials and develop meaningful, lasting relationships within the financial landscape: • Court Upscale Millennials: Upscale Millennials represent a key area
of opportunity for financial institutions. These consumers are more likely to be more established and settled than their generation as a whole. Upscale Millennials have already amassed significant wealth and their early life stage indicates they’re only at the beginning of building their portfolios. Focusing on upscale Millennials will deepen engagement and build loyalty with this lucrative segment for the long term.
• Be Transparent and Make it Personal: Millennials are cautiously optimistic and value authenticity in their interactions with financial institutions. Developing a dialog through an open, transparent relationship with Millennials will build trust and engagement. They are risk-adverse and like to feel a part of the process. Give Millennials the opportunity to do their own financial research and customize their financial planning to meet their specific, individual needs in a variety of channels.
• Provide a Range of Options for Saving and Investing: Millennials are focused on saving for both the short term and long term. When Millennials have extra cash, they are it into savings accounts. However, these young consumers are still establishing themselves and need flexible options for saving and investing with low points of entry that will allow them to grow their assets. Likely to marry and purchase homes later in life, building relationships through trust and partnerships today will enable bigger opportunities in the future.
11Copyright © 2015 The Nielsen Company
ABOUT NIELSEN Nielsen N.V. (NYSE: NLSN) is a global performance management
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consumers Watch and Buy. Nielsen’s Watch segment provides media and
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as well as analytics that help improve performance. Nielsen, an S&P 500
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percent of the world’s population.
For more information, visit www.nielsen.com.
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