New Study Finds Millennials Lack Confidence In Their Investment Knowledge

A study co-sponsored by CFA Institute and FINRA examined the relationship between Millennials and investing. For anyone keeping abreast of the conversation surrounding Millennials and financial literacy, their results might be something of a surprise.

Millennials are commonly explained as tech savvy, informed individuals who are confident making their own financial decisions in an increasingly tech-integrated approach. The generation has been widely credited for the rising robo-advisor trend, among other innovations in investments. It has long been said that Millennials struggle to save due to burdens of large debt and stagnant wages. While these are not to be dismissed, the research by the CFA and FINRA <http://www.finra.org/newsroom/2018/cfa-institute-and-finra-foundation-study-debunks-common-myths-about-millennials-and > reported that 39% of Millennials who are not currently investing say that lack of knowledge is their biggest barrier.

The myth-busting does not stop there. The study also found that only 21% of Millennials are confident about financial decisions. That means 79% of Millennials doubt their financial decisions, far from the overconfident and impatient persona they are so often made to wear.

Instead of embracing automated solutions like robo-advisors, 58% of Millennials would prefer to work with a financial professional in-person to make investment decisions. This is a similar number found in older generations, suggesting that robo-advisors may not live up to their current trendy projections. Conventional thinking suggests that Millennials have a mistrust of financial professionals and products. However, this study found that 72% of Millennials who work with a financial professional are satisfied with the experience and that only a small percentage of Millennials mistrusted these professionals.

Millennials are sometimes described as having a sense of entitlement and an impatience for the sort of long-term wealth-building necessary for a comfortable retirement. This research suggests that in truth, Millennials have smaller or similar financial goals than their parents and grandparents had. Instead of impatience, lack of investment literacy is the primary barrier they face when it comes to investing.

Arguably, the most important myth to debunk about Millennials is that making generalizations about Millennials is difficult. Rather than being a group of people with similar worldviews, Millennials are a diverse generation with a wide variety of views and attitudes, particularly about investing.