Vanguard DA- Audience Perception/General

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Part
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Demographics - Adults With <$250K in Investable Assets

Demographics - Adults With <$250K in Investable Assets

Investable assets comprise liquid cash, funds in bank accounts, mutual funds, bonds, stocks, deposit certificates, insurance contracts that hold monetary value, and money in retirement accounts. Tangible assets, that are not considered investable assets, comprise real estate, gold, jewelry, automobiles, artwork, and other items that are considered an individual's property. Based on the available data, U.S. adults in the age group 25-45 years having investable assets less than $250,000 can be classified into three categories - those who do not have any form of investment; those who hold retirement investment accounts only; and lastly, those who actively invest in taxable investment schemes besides having retirement investment accounts. For the purpose of this demographic analysis, only the latter two categories have been considered. The demographic data and our comprehensive research methodology are presented below.

Demographics of U.S. Adults Aged 25-45 With Less Than $250,000 in Investable Assets Who Invest Only in Retirement Investment Accounts

  • As per a study, the median average investable assets of the respondents in this category is $76,000.
  • In this category, 70% people indicated their willingness to take risks, 21% were risk-averse, and 9% were unsure what to do with their money.
  • Race/ethnicity: In this category, 73% respondents were Caucasian, 15% were African-American, 8% were Asian-American, and the rest 4% were of other races.
  • Gender: 56% respondents in this category were female while the rest 44% were male.
  • Income level: The median income of the respondents in this category came out to be $54,000.
  • Educational level: 85% respondents in this category had at least an Associate's degree or higher.
  • Occupation type: 87% respondents in this category reported to be full-time employees of their respective companies.

Demographics of U.S. Adults Aged 25-45 With Less Than $250,000 in Investable Assets Who Actively Invest in Taxable Investment Schemes Besides Having Retirement Investment Accounts

  • As per a study, the median average investable assets of the respondents in this category is $173,000.
  • In this category, 87% people indicated their willingness to take risks, 11% were risk-averse, and 2% were unsure what to do with their money.
  • Race/ethnicity: In this category, 79% respondents were Caucasian, 12% were African-American, and 9% were Asian-American.
  • Gender: 63% respondents in this category were male while the rest 37% were female.
  • Income level: The median income of the respondents in this category came out to be $73,000.
  • Educational level: 89% respondents in this category had at least an Associate's degree or higher.
  • Occupation type: 79% respondents in this category reported to be full-time employed, out of which 6% were business owners.
  • As per a report by TD Ameritrade, a few of the companies among the Top-10 most popular stocks that U.S. millennials in this category regularly invest in are Apple, Facebook, Amazon, Tesla, and Microsoft, among others.

Research Strategy

We started our research by identifying what comprises investable assets to gain a deeper understanding for our research. Next, we tried to focus on the public domain in search of any research reports, expert blogs, news articles, and other relevant information. However, even after an exhaustive search, we could not find any information that targeted the age group of 25-45 years specifically. Next, we searched for age-specific data and it was evident that all information in the public domain is as per generational groups.

As per Pew Research Center, the Millennial Generation (or Generation Y) is defined as people born between 1981 and 1996, while the previous generation (Generation X) is defined as people born between 1965 and 1980. Hence, the Millennial Generation is now aged between 24 and 39 years, while Generation X is aged between 40 and 55 years. Thus, the Millennial Generation covers 75% of our targeted age group 25-45 years. Also, whereas only 13% of the Millennial Generation has accumulated investable assets worth $250,000 or more, the corresponding figure for Generation X is 29%. Hence, it was opined that the Millennial Generation will provide a closer approximation for our intended research.

During our search for reliable publicly available demographic data, we stumbled upon a few roadblocks. Most of the available research reports of credible organizations like Bloomberg, Bank of America, Merrill Lynch, and Forbes, among others are either focused exclusively on affluent millennials whose investable assets are $250,000 and above or do not contain sufficient demographic data to support our research. Other reliable sources like the website of the United States Census Bureau do not contain the latest data. Finally, after extensive search, we found a report produced by a joint effort of the United States government sanctioned agency FINRA, the CFA Institute, and leading market research firm Zeldis Research Associates.

Also, even though we tried to find demographic analysis for the marital status of the respondents, we could not find such data in the said report. Hence, we have presented the demographic analysis of the occupation type of the respondents involved in the research.
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Part
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Attitudes Towards Investing and the Number That do Invest

It is estimated that 180.1 million people between the ages of 24 and 44 are investing in securities. Additionally, this age group is more cautious than the same age group was before the stock crash of 2008, and also are interested in impact investing. Additional details are provided below.

Number Investing

  • Forty three percent of U.S. Millennials do not invest their money, which means 57% (100%-43%) do. However, it should be noted that this figure represents all types of investments, including real estate. If data for securities investments only is considered, then only 45% (22%+23%) of Millennials are actually investing.
  • Pew Research defines Millennials as those born between 1981 and 1996. So in 2020, that would put the age group roughly at 24 (2020-1996) to 39 (2020-1981).
  • As of 2018, Millennials represented 22.03% of the population. With an estimated U.S. population of 327.2 million in 2018, that means about 167.5 million (327.2 million*0.45) Millennials are investing in securities.
  • Although data specific to the 40-45 age range was not publicly available, statistics show that about 62% (29%+33%) of Gen Xers, which this age group belongs to, are investing in securities. With an estimated population of 20.3 million for the 40-44 age group, it is estimated that about 12.6 million (20.3 million*0.62) people are investing.
  • Therefore, an overall estimate of the number of investors between 24 and 44 is 180.1 million [167.5 (# Millennial investors) + 12.6 million (# of investors 40-44)].

Attitudes Toward Investing

  • Twenty one percent of Millennials have invested less than $500 in their lives.
  • Impact investing appeals to more than 55% of both millennials and Gen Xers in the United States. This is investing that focuses on having a positive societal impact, as well as providing long-term returns. The focus could be on socially responsible investing or investments that consider environmental, social and governance (ESG) factors.
  • About 2/3 of both Millennials and Gen Xers, which would include the 25-45 age cohort, place securities orders online.
  • When Millennials were asked their top reason for not investing, 45% said they don't have the money, while 16% said they are not interested in investing.
  • Younger Americans, those under age 35 were impacted by the stock market crash of 2008 and it caused them to lose confidence in stocks. Investment levels for this younger age group were considerably lower in 2017/2018 than they were in 2006/2007, prior to the crash.
  • Almost 50% of the 25-45 age group indicated that they don't invest because they are "too worried about current financial situation to think about future."
  • The 25-45 age group is more likely than older investors to make quick decisions about investments when there is political upheaval or volatility in the stock market.
  • Millennials, which represent the majority of the age cohort of interest, are more likely to have a written financial plan (31%), specific savings goals (36%), and to regularly rebalance their portfolio (about 75%) than the older population of Americans.
  • Real estate is the preferred long term investment for all Americans, regardless of age, with 31% choosing real estate as the best investment for money not needed for at least 10 years. For Millennials, 36% chose real estate.

Research Strategy

To uncover data on the investment attitudes of the 25-45 age cohort, we examined financial websites and reporting such as Yahoo Finance, Gallup, Schwab, and Bankrate. The majority of data found was broken down either into generational groups such as Millennials and Gen Xers, or into larger age groups such as 18-34 and 35-54. Therefore, to obtain data on the requested age group, it was necessary to piece together data from various sources. Some data provided is specific to Millennials, which covers the 25-39 portion of the group, while other data focuses on Gen Xers. However, in many cases we were able to analyze the data to provide insights specific to the requested age group. Each insight provided clearly states the age group represented.
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Part
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Banking/Savings Versus Investing

Those in the 25-45 year old age group have had some major economic events occur over their life times. They witnessesed 911 and the economic turmoil that followed. The felt the effects of the recession that followed the market crash of 2008. The fallout of these events has shaped how this demographic views savings and investment. Those born between 1980 and 1994 are known as Millennials or Gen Y. They are currently aged 26-40 years old. The demographic also includes the tail end on Gen X.

Views on Investment

  • The fallout from events as they grew up has seen this demographic adopt an increasingly global mindset concerning investments. However, this generation does not just invest in just anything. Social responsibility and the environment is playing an increasing role in where and how this demographic invests its money. Their investment philosophy is that "the investment must enrich not only themselves, but the world around them."
  • They are distrustful of any financial advice from financial advisers or their parents. Many of this group prefer to trust their own instincts or rely on their friends when making decisions about investing money. Financial advisers are considered salespeople, looking out for only their own interests.
  • If Millennials are going to invest in an organization, then they will need a personal connection with the organization. Despite having mobile technology to manage and invest their money, the personal connection is not trumped. Millennials need to feel like they are valued. They expect the information about their investments to be instantly accessible.
  • Venture Capitalist Richard Vibert of Arbor Ventures discussed this age group's attitude to investment, "Investing has radically changed since my parent's generation, they thought in terms of saving from a young age to buy a house. Our generation is more interested in investing in assets like cryptocurrency and in real estate in another country that you can buy via an online platform, rather than owning a home."
  • Due to the economic turmoil during their formative years, this generation is risk adverse. They have a cautious approach to investment. 30% of Millennials consider cash their favorite investment, all other generations preferred stocks.
  • When this demographic decides to invest, they like to keep it simple. They are one of the main reasons for the push toward index mutual funds.

Views on Savings

  • The women of this generation are more likely to be frugal, placing a high emphasis on savings, while the men are more likely to be attracted to material things.
  • RBC venture capitalist, Ai Ling Toh, explains the attitudes to savings in this age group, "The older generation focused completely on building wealth and their businesses, the younger people I work with think more about themselves, their lifestyle and finding a purpose for their lives."
  • The pension schemes and savings rates that were available to their parents are no longer available to this generation. While they still want to buy their first home, they see at as a home, not the investment that their parents considered it. This group is worried about its financial future but currently would rather spend money traveling. They expect that they will work well into their retirement years, with any pension funding, not this 60+ lifestyle, but a "social care plan for their final years."
  • This age group are DIY savers. They prefer to adopt a piecemeal approach to saving for their retirement. 53% believe that their retirement income will come from a 401k plan; half of those offered a retirement plan will save in it. Less than 40% are taking part in employer plans currently.

Investing vs. Saving

  • Research has found that Millennials can be great savers, with over 25% of those who were saving, having saved more than $100,000. While they are happily putting that money away for a future event, they are decidedly less happy about investing it in the stock market.
  • TransAmerica's recent survey identifies "super savers." 39% of 25-45-year-olds fit the definition of a super saver, by saving more than 10% of their weekly salary.
  • 42% of this group invests cautiously when compared to other generational groups. They hold 25% of their investments in cash, compared to the 19% of other generations.
  • Two-thirds of this group finds the stock market intimidating or scary. Only 58% of those 40-54 and 57% of those over 55 had similar views.

Metrics Relating to Savings and Investment in 25-45 Year Olds

  • 55% of Millennials do not have a retirement savings plan. 13% have a retirement plan but do not actively contribute to it.
  • 66% of Millennials say that the major reason they don't have a retirement savings plan is they do not earn enough, 13% consider this a minor reason for not having a retirement plan. 70% of those that did not earn enough to save, earn less than $50,000 per year.
  • A recent study showed that this demographic is not as clueless financially as they make out; nearly half of them have saved a big enough deposit to be in their own home and 28% of this age group have investment portfolios.
  • 66% of those in this demographic are kept up at night worrying about their finances.
  • The top three financial firsts for this demographic are, start saving (22%), pay of debts (21%), and set financial goals (16%).
  • 91% of this age group is a saver of some sort. 33% will save more in 2019 than they did in 2018.
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Part
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Preferences for Investing

Although the research team could not provide information and hard data specific to how American adults aged 25-45 prefer to invest, the team have provided an analysis of the investment preference of millennials in the U.S. Research found that most millennials in the U.S. prefer to use a financial adviser while making investment decisions. Also, managed portfolios of investments, mutual funds/exchange-traded funds, and stocks are the most preferred investment options for millennials in the U.S.

Goals for Investing

  • A survey by BMO Wealth Management revealed that most millennials in the U.S. (47%) invest for retirement. 26% invest for upgrading or purchasing a house, 23% invest for an emergency fund, and 21% invest for short-term goals such as vacations.

Investment Preferences

  • The survey revealed that 28% of millennials prefer to invest in managed portfolios of investments, while another 28% prefer mutual funds/exchange-traded funds. 21% invest in individual stocks, 15% on CDs and money market securities, 13% on bonds and fixed income investments, 11% through insurance policies, and 5% on others.
  • Another survey by Investopedia on affluent millennials revealed that 37% of affluent millennials are willing to invest in stocks, 19% on bonds, another 19% on CDs, 21% on high-yield savings, and 9% on annuities.
  • The report by Investopedia also revealed that 21% of affluent millennials allocate funds to a traditional savings account, while only 9% invest in real estate.

Need For Professional Assistant

  • The survey by BMO revealed that most millennials prefer to work with the assistance of a financial professional, although in different forms.
  • According to the report, 24% of millennials want to work with a financial adviser from a financial institution, another 24% would prefer an independent financial adviser. 13% prefer to work with a full-service investment broker, 18% would like to invest through a self-directed discount brokerage, 13% prefer to buy a public company’s stock certificate, while only 10% prefer a robo-advisor.
  • This is also supported by a survey by Investopedia, which found that 43% of the survey respondents have a financial adviser, with 20% using a robo-advisor.
  • 65% of affluent millennials trust financial advisers for investment assistance because they are twice as likely to report better investments while sticking with an adviser than not.
  • The survey revealed that affluent millennials "also trust books (58%), TV shows (54%), newspapers (53%), podcasts/radio (49%), magazines (48%), websites/blogs (37%), and YouTube (or similar video platform) videos (27%) for financial advice—just not as much as advisers."

Feelings About Investment

  • BMO reported that 26% of millennials are satisfied with their investment, 24% are comfortable investing, while 19% are feeling confident about investing.
  • The report also established that 18% of millennials are confused about investment, 15% are overwhelmed with investment, and another 15% are stressed about investment.

Research Strategy

To provide information, data, and statistics surrounding how adults aged 25-45 in the U.S. prefer to invest, the team commenced with an extensive search through educational institutes and universities databases in the U.S. We hoped to find studies and research made by experts in this field on the investment preference of U.S. adults aged 25-45. However, no relevant information specific to this age bracket was found after searching through sources such as the CFA Institute, the American University of Washington, and others.

Next, we searched through articles published by top financial organizations such as Forbes, Accenture, BMO, and others. We hoped to find expert analysis and survey reports from these sources. While we found survey reports from these sources, the reports provided an analysis of the investment preference of US adults broken down by generations. No publication specific to adults aged 25-45 was available.

Furthermore, since we found surveys on the investment preference of adults by generation, we looked to understand the age bracket that is covered by adults aged 25-45. According to Pew Research, those born between 1981-1996 (currently 24-39) are classified as millennials. Those born between 1965-1980 (currently 40-55) are classified as generation X. Therefore, of the age sample being considered (21 years), 15 years (25-39) fall into millennials, while 6 years (40-45) fall into the generation X. As such, we have provided data on the investment preference of millennials in the U.S. on the bases that most of the requested age samples fall into this generation. Note that we have included data from a survey report that is over 24 months old which is beyond Wonder standards. However, we have used this report because it is still being referenced in recent articles.


Part
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Part
05

Life Stages and Investing

The specific life stages aligning to the crafting of an investment strategy for an individual are prior to marriage, post marriage, during parenthood, and retirement. The investment decision and the associated risk management varies for each life stage. In the brief are an overview of the different life stages, strategies, approach to risk, and recommended products.

Pre-Marriage

  • Prior to marriage, two stages for investment decisions are when a person gets their first job and when they get a raise. Factors in favor of this investor include the benefit of a young age, the availability of more funds to invest, and no dependents. Young investors enjoy a lack of responsibility and with no dependents they can invest more, up to 60-70% of their salary, for longer periods, usually 10 to 15 years.
  • The investment strategy to use at a first job is to initiate and build a cash reserve, usually by opening a savings account. It is also beneficial to open and make regular contributions to a retirement fund. The investor must know of the costly later implications of accessing tax deductions on retirement accounts. The investment strategy to use when receiving a raise include continuing to increase the cash reserve, use after tax income by investing in municipal bonds offering tax-exempt interest, and increasing the fund contribution to employer sponsored retirement plans.
  • Managing investment risk at this stage is much easier that at later stages as individuals have little or no debt and can take risks much easier than someone with other financial commitments. Estate planning at this stage should comprise ensuring appointment of a power of attorney for finances, beneficiaries for accounts, and a will completed. Investment products that are ideal for persons at this stage of life include bonds, public provident funds, life insurance, stocks, mutual funds, and unit-linked insurance plans.

Post marriage

  • Besides changing the investment strategy at marriage, persons in this group should also reconsider their investment strategy when buying their first house and when changing jobs. Factors to consider during this stage include the addition of a financial dependent, a reduction in income to invest, the need for liquidity, and a change in risk management.
  • Newly married investors have increased expenses to contend with, including the need for monetary liquidity for emergencies, and will also need to consider the input of their spouse when making investment decisions. These factors reduce the income for investing to 30-50% of their income. Estate planning while marriage adds life insurance to the requirements listed above.
  • Upon marriage, the combined income and expenses of the household influence the investment strategy. Investors can use part of the non-retirement savings at this stage as a short-term investment to fund the down payment and moving costs when purchasing a first house. A change of a job with a new salary and benefits package triggers a review of the retirement savings plan. If allowed, the investor can opt to keep the money in their previous pension plan, or they can transfer to the new plan, take a cash distribution, or place the money into an individual retirement account.
  • Medium risk investments are ideal at this stage, and gaining additional responsibilities requires risk neutrality. Investment products recommended for this stage of life include equities, health insurance, mutual finds, debt instruments, and real estate. At this stage it is also advisable to hire a financial adviser.

Parenthood

  • The addition of children to a marriage impacts the availability of funds and the risk management for an investment strategy. Household expenses increase with more financial dependents, lowering the amount available for savings and triggering a preference for lower risk and returns. Investors in this group should aim for investing up to 30% of their income.
  • With the addition of a baby, the investment strategy should be to increase the cash reserves and insurance coverage, in addition to starting a college fund. Once the children are out of the home, the income that opens up should go into retirement savings. Investment products ideal at this stage include pension plans, plans for children, gold, recurring deposits, and life, health and unit-linked insurance plans.

Retirement

  • Upon retirement, the investment strategy changes to accommodate lower risks, shorter term investments, and the need for liquidity. The investor enjoys the returns from earlier investments. At this stage factors to consider include needing increased liquidity to cover day-to-day and monthly expenses, and for a shorter term, low-risk investments. At retirement, the goal is to invest 20% of income.
  • Just prior to retirement, at age 55, the investor should review and adjust the amount allocated to the retirement fund and for shorter time frames for contributions. At retirement, consider the options for accessing the company retirement plan and review the sources of income available to the household to determine the need for adjustments in current investment practices, to provide for growth to neutralize inflation, and to fund later years.
  • The risk management policy at this turn should be to avoid risk as much as possible. Investment products suitable for this stage include shorter term fixed deposits and senior citizen savings schemes. Retirees should also have planned for the impact of taxes on investment returns where tax deductions on retirement accounts were accessed in the early working years.

Generational Investing

  • According to a survey by Go Banking Rates, 30.1% of persons between the ages of 55 to 64 have no savings. This increases to 33.3% of those over age 65. At the other end of the scale, 30.7% and 33.1% in the 55-64 age group and over age 65 respectively have savings over $50,000.
  • For persons between the ages of 45 and 55, those with no savings amount to 45.2%, while 26% have savings over $50,000. Individuals between the ages of 35 and 44 with no savings amount to 42.5%, while 25.7% have in excesses of $50,000 and for persons between the ages of 18 to 24, 63% have no savings, but 6.6% already have over $50,000.
  • The preferred method for retirement savings with over 40% for all age groups is the savings account. Next are 401(k) plans, individual retirement plans, and finally high yield savings or money market accounts.

Research Strategy

To identify the life stages that align to investing, the research team began with a general search for life stages and investing. This search yielded information from Merrill on investing throughout life stages, the different risk strategies to use at different life stages, life stage investing from Bankbazaar.com, and life stages and investments from Tomorrow Makers. Articles on retirement planning from Investopedia was used to supplement this information along with one on estate planning from Forbes magazine. Finally, a search for the investment habits of different age bands that roughly correlate to the different life stages. This led to the results of a survey conducted in 2019 by Go Banking Rates used in the report.
Part
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Part
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Seeking Advice for Financing

According to a study conducted by Investopedia, financial advisors are the most trusted source of financial information for millennials. They also rely on books, television shows, newspapers, podcasts and radio programs, and magazines to gain advice on how to invest their money.

Financial Advisors

  • According to an Investopedia study, 65% of millennials seek advice on financial matters from a financial advisor.
  • Millennials who consider themselves knowledgeable about investing are twice as likely to use a financial advisor over those who feel less knowledgeable.
  • Moreover, having parents who used a financial advisor increases the likelihood that millennials will also use a financial advisor.
  • Millennials trust financial advisors more than members of generation X do (58%).

Books

  • The Investopedia study indicated that 58% of affluent millennials trust books for advice on financial matters.

Television Shows

  • Television shows are trusted by 54% of millennials when it comes to getting financial advice.

Newspapers

  • Millennials prefer newspapers for their financial advice only slightly less (53%) than television shows.

Podcasts and Radio Programs

  • Podcasts and radio programs are trusted by 49% of millennials for financial advice.

Magazines

  • At 48%, magazines are trusted only slightly less than podcasts and radio programs.

Websites and Blogs

  • Millennials tend to trust websites and blogs less than other sources for financial advice, as only 37% turn to websites and blogs for investment information.

YouTube Videos

  • Millennials trust YouTube videos the least of all sources mentioned here, at just 27%.

Research Strategy

In an effort to find out where adults between the ages of 25 and 45 turn when seeking out advice for finances, we began by looking for surveys that provided insights into this topic. However, we quickly found that this is not an age bracket that is typically studied and most surveys broke down the data by generation rather than a specific age group. Using Pew Research's determination that millennials would be between the ages of 23 and 38 in 2019, we decided to use millennials, who will be between the ages of 24 and 39 in 2020, as a proxy for the requested age bracket.
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Part
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Motivations for Switching Investment Companies

A large percentage of the adults between 25 and 45 years are millennials, while a few them are Gen Xers. According to Forbes, both millennials and Gen Xers are about to inherit an estimated $30 trillion in assets from Baby Boomers. Adults aged 25-45 have many investment options but how they invest will largely be dependent on the investment firms they choose. Some of the motivations for switching investment companies for adults aged 25-45 include sustainable investing and tech-savvy investment companies.

Millennials Want to Combine Financial Returns With Positive Impact

  • One of the reasons why millennials are likely to switch investment companies is because they are looking for sustainable investing. This means that other than getting financial returns, they also want to have a positive impact.
  • According to Forbes, millennials focus on making a better tomorrow and therefore, they are most likely to invest in companies that support their ideals.
  • A Fidelity Charitable study supports what Forbes stated because they found out that 77% of millennials have put their money into an investment company that generates returns as well as offer social or environmental benefits.
  • Although it dates back to 2017, a survey by Morgan Stanley Institute for Sustainable Investing is still being used as recent data and from the survey, 86% of millennials are interested in sustainable investing and are thus likely to switch to investment companies that pursue positive social and/or environmental impact as well as generate returns.
  • Therefore, to motivate millennials not to switch to another investment company, companies can support environmental causes, local initiatives such as affordable housing, and/or focus on issues such as gender diversity.

Millennials are Interested in Digital Ways to Invest or Manage Finances

  • Other than sustainable investing, millennials are also attracted to tech-savvy investment companies and this could be one of the motivations for them to switch companies. Forbes states that it is because most of the adults in that age bracket were raised with technology and are thus willing to invest in innovations that will change how investments are handled and the future in general.
  • Millennials expect large banks to partner with Fintech companies and provide them with new digital ways for them to invest their money.
  • Technology makes life easy and convenient for millennials. Therefore, they are likely to switch to investment companies that use technology to make their experiences simpler, self-serving, and convenient.
  • A 2017 study by Accenture noted that 65% of millennials want gamification that will not only help them to learn more about investment but also keep them more engaged with their portfolio. Additionally, 67% of them want Robo-advisors, 66% want a self-directed investment portal with advisor access, and 63% of them want a mobile platform that directly connects them to advisors.
  • Therefore, since millennials wish to spend less time in offices of financial advisors, investment companies can expand their digital offerings to make them stay and not jump ship. Digital investment content platforms and Robo-advisors are some of the tech-savvy solutions that will ensure they stay because instead of them spending a lot of time in offices, they will have more time to make investment decisions and monitor their portfolios through their digital devices.

Research Strategy

To complete this request, we started by trying to understand what generation adults aged between 25-45 belong to and we found that this is not an age bracket that is typically studied. However, we found out that most of the adults in that age bracket are millennials which made us decide to use millennials as a proxy for the requested age bracket.
With this understanding, we then proceeded to search for news articles, press releases, reports, and media publications on motivations that would make the adults in this age bracket switch investment companies.
We searched through credible sources such as Forbes, Business Insider, Medium, Fortune, and Accenture among others and we were able to find information repeatedly mentioned by some of them on the related topic. This information enabled us to compile the above findings as well as include statistics that prove why the above motivations are popular with the requested age bracket and what investment companies can do to make them stay.

Part
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Part
08

Life Stages and Investing Correlation

According to Ameriprise Financial's Ages, Stages, & Money Study, younger people are focused more on investing in 401k plans or other retirement accounts and finding ways to pay down debt, while older people are focused more on investing in brokerage accounts and diversifying their assets. More statistics and data from this study are below.

People in Their 30s

  • For people in their 30s, buying a house has the most impact on their financial situation.
  • Debt is a concern for 61% of people in their 30s and their top three financial concerns are the loss of a job, their health (and that of their family), and market volatility.
  • In their 30s, 85% are thinking about investing in a 401k or other retirement account, 70% are thinking of ways to pay down debt, 65% are thinking about diversifying their assets, and 53% are thinking about investing in a brokerage account.
  • Additionally, 49% of this age group considers themselves asset accumulators and are "looking to balance accumulating financial assets with managing debt." The other 51% consider themselves asset maximizers and are " focusing on growing assets for retirement and other long-term goals."

People in Their 40s

  • For people in their 40s, starting or changing a job has the most impact on their financial situation.
  • Debt is a concern for 62% of people in their 40s and their top three financial concerns are the loss of a job, their health (and that of their family), and market volatility.
  • In their 40s, 86% are thinking about investing in a 401k or other retirement account, 78% are thinking of ways to pay down debt, 72% are thinking of diversifying their assets, and 51% are thinking about investing in a brokerage account.
  • The majority of this age group (73%) consider themselves asset maximizers, while 25% believe they are still in the asset accumulation phase. Just 2% believe they are asset sustainers who are "determining draw-down strategies and adjusting investments to make their money last."

People in their 50s

  • For people in their 50s, their children's accomplishments have the most impact on their financial situation.
  • Debt is a concern for 48% of people in their 50s and their top three financial concerns are their health (and that of their family), market volatility, and changes in government benefits.
  • In their 50s, 81% are thinking about investing in a 401k or other retirement account, 79% are thinking about diversifying their assets, 65% are thinking of ways to pay down debt, and 59% are thinking about investing in a brokerage account.
  • As with people in their 40s, the majority of people in their 50s (75%) consider themselves asset maximizers, but more people in this age category (17%) consider themselves asset sustainers. Just 7% consider themselves asset accumulators.

People in their 60s

  • For people in their 60s, retirement has the most impact on their financial situation.
  • Debt is a concern for 31% of people in their 60s and their top three financial concerns are their health (and that of their family), changes in government benefits, and market volatility.
  • In their 60s, 79% are thinking about diversifying their assets, 61% are thinking about investing in a brokerage account, 50% are thinking about investing in a 401k or other retirement account, and 48% are thinking of ways to pay down debt.
  • In their 60s, 67% consider themselves asset sustainers, compared to 31% who believe they are asset maximizers, and 2% who believe they are asset accumulators.

People in their 70s

  • For people in their 70s, retirement has the most impact on their financial situation.
  • Debt is a concern for 23% of people in their 70s and their top three financial concerns are their health (and that of their family), market volatility, and changes in government benefits.
  • In their 70s, 78% are thinking about diversifying their assets, 63% are thinking about investing in a brokerage account, 43% are thinking of ways to pay down debt, and 27% are thinking about investing in a 401k or other retirement account.
  • Nearly all (90%) people in their 70s consider themselves asset sustainers, with only 8% considering themselves asset maximizers.
Part
09
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Part
09

Investing and Other Interests

Limited information was available in the public space for individuals already investing and have exterior interests aside from the investment arena. However, according to a report, Schwab's advisory solutions have grown steadily by 18% since 2018, showcasing a large percentage of millennials interested in their quality of life while having investments. Also, included are some certified investment planners who are all avid fitness enthusiasts.

Statistics on Who is More Likely to Invest

  • According to Joe Vietri, senior vice president and head of Schwab’s retail branch network, Schwab held over 140,000 planning conversations with clients in 2017 and the numbers have been increasing steadily since assets in Schwab’s advisory solutions grew faster than client assets. Investments are up 18% year-over-year to $273 billion as of March 31, 2018.

Investment in Quality of Life

  • According to the Vietri, younger investors aren’t just saving and investing for retirement, they understand they need to save for long-term goals, but also save and invest to fund near-term passions like travel and life experience.
  • The focus on nurturing themselves to improve their quality of life is why they are engaged with their money. Millennials interestingly are the least likely generation in the survey to think the amount of money they have doesn’t merit a plan.

A Connection Between Fitness Enthusiasts & Financial Planning

Research Strategy

Our initial focus and first approach were to find any statistics and data that could establish individuals investing and yet also having exterior interests outside the investment space. Only limited information consisting of recent hard data and statistics are available to assist us in answering how someone who already owns or have an investment is likely to be interested in something outside the investment arena. We were able to find a 2016 PWC report, detailing some hard data that may be of help to the client but found no such report less than two years. Hence, the above source wasn't included in our findings but serves as source-only data that may be useful to the client.

As a second approach, we shifted our focus by searching for demographic and psychographic profiles of the typical investor using financial planning services. The team was able to extrapolate some information from a Schwab news report which contained a 2018 study on age groups likely to have financial planning and investment, while still catering to their quality of life. Also, we found a CNBC news report on how athletes are required to have an investment advisor. With the above data, we then tried to triangulate the information by searching for generational attributes for investment and deriving their interests based on their financial planning habits.

Finally, through various sources via investment platforms such as Fountainhead Wealth, Wealth Management Advisors, LLC, among others, we were able to highlight some individuals who are already in the investing space but are also interested in their quality of life since they are fitness enthusiasts.


Part
10
of thirteen
Part
10

Case Studies - Notable Finance Brands: New Products and/or Services

Today, more brands are placing themselves strategically to capture the attention of millennials. These brands are embracing social media platforms in this digital age, and they have continued to benefit from these strategies.

Morgan Stanley Wealth Management

  • With tens of thousands on each of their social media platform, Morgan Stanley Wealth Management is a finance brand with services that appeal to the millennials. Founded in 2009, this brand has various products for its clientele. Some of these products and services include investment banking, retail brokerage, and asset management.
  • As of 2019, the brand had an estimated client asset of $2 trillion. Morgan Stanley Wealth Management has always used various social media platforms to appeal to its target audience. Once, an agent raked new business worth $10 million, just from LinkedIn connections.
  • As much as the brand seeks to appeal to millennials, its social media tone is analytical and educational, which is relatable to both millennials and Generation Z. The brand is consistent in posting not only financial analyses and charitable endeavors, but also addressing financial questions and interacting with their online audience through offering financial advice.
  • The brand continues to uphold a venerated stature as is clear on the social media platforms. As the digital platforms continue expanding, this brand seeks to keep up with the trend, as they now have a podcast that truly establishes the brand in the financial space.

New York Stock Exchange

  • The New York Stock Exchange (NYSE) has managed to position itself as a brand that millennials can resonate with. The brand has achieved this by taking chances with digital platforms, and particularly social networks, making the brand one of the most popular finance brands on virtual platforms.
  • NYSE takes social media presence seriously, that it has a department and a manager that oversees digital and social media activity and interactions. Further, the brand has used these platforms to share highlights, such as opening and closing bell ceremonies, which are streamed live on the brand’s official Facebook page.
  • This kind of aggressive and consistent interaction has created a virtual bond between the brand as its followers, as they are allowed to witness the behind the scenes of the brand. The visual content has continued to pay off, based on the 9.5 score rating as one of the best financial services.

Capital One

  • While Capital One is a relatively new brand, it has sought to establish and familiarize itself as one of the fastest-growing banks in the United States. Through its social media platforms, the brand has garnered over 4 million followers and this has made it possible for the brand to market its financial services.
  • Capital One has applied strategies such as hosting major events to promote the brand to millennials. These events include hosting concerts, partnering with the NCAA and associating with worthy causes such as March Madness. These strategies have continued to place the brand among the most noticeable financial service brands among millennials in the US.
  • Capital One has invested in social media as it has a department that oversees digital brand strategies on behalf of the company. The strategies are shared on the official social media sites such as Facebook.
Part
11
of thirteen
Part
11

Case Studies - Notable Brands: New Products and/or Services

Nintendo Switch, Off the Beaten Path, and Gatorade Bars are three products launched by notable brands in the last three years. The brands use social media and influencer marketing to target millennials. Nintendo Switch also reached millennials via "print, commercials, and conventions".

NINTENDO SWITCH

  • The website can be found here.
  • According to Morning Consult, Nintendo was America's sixth-most loved brand in 2019.
  • Nintendo Switch was launched in the United States on 3rd March 2017 for $299.99.

The Product

  • The Nintendo Switch is a versatile gaming console that can be used to play at home and on-the-go.

How Millennials Were Targeted

  • Nintendo launched the Switch to "excite and win back core gamers"; millennials were the target demographic.
  • The Nintendo Switch's tagline: "A home console you can play on the go." The Switch's pitch was that it allowed users to play together anytime and anywhere.
  • The launch advertisements indicated that Nintendo Switch was targeting millennials (the Switch now targets a broader audience). An analysis of internet users in America who commented on the Nintendo Switch at the time of its launch found that they were primarily men aged 20-35. Therefore, this research is focused only on the launch campaign.
  • The advertisements were centered around how the Nintendo Switch allows users to "seamlessly switch play modes" and allows "intimate local multiplayer experiences". Scenarios in which users played Mario Kart in a moving car and Skyrim on a plane seat were shown.
  • Gamers in the US were very excited about the prospects of being able to play out of home and while moving around within their own house from room to room.

Media Vehicles

  • The Nintendo Switch was advertised on the SuperBowl before its launch in March. According to Nick Chavez, marketing head at Nintendo, "there’s no bigger stage in the U.S. on which to showcase the platform." The 2016 SuperBowl has 112 million viewers.
  • Nintendo promoted the Switch through typical channels such as "social media, print, commercials, and conventions". Additionally, it had special launch events and distributed "free goodies, console cases, and t-shirts". The Switch was also sent to social media influencers so that they could play, compare, and promote it.
  • It was heavily promoted at the gaming conference E3. And, it was paired with Zelda Breath of the Wild, a very popular game among millennials and young GenXers.

Social Media

  • The Nintendo Switch 3-day launch event made a "big impact on social media". The event featured on almost "every social media news feed".
  • A social media campaign was run where fans were asked to complete the phrase "I want a #NintendoSwitch because…" in order to win a free Nintendo Switch. This accounted for half the posts during the 3-day event.
  • Fans discussed the Switch and expressed their emotions for it in the days following the launch event (using #NintendoSwitch). Ninety-seven percent of gamers shared their experiences on Twitter; very few took to Instagram.
  • The buzz on social media created positive first impressions for those who were not able to make it to the conference and try out the console and gave the brand a lot of visibility.

OFF THE EATEN PATH (PEPSI CO.)

  • The website can be found here.
  • Off the Eaten Path was launched in 2017.

The Product

  • Off the Eaten Path is a "better-for-you snack chips" brand made with "rice, black beans, chickpeas and other less-processed ingredients" that targets millennials. It has "no artificial colors, flavors or preservatives and is designed to deliver complex and exotic flavors". Off the Eaten Path chips are essentially healthy snacking chips.

How Millennials Were Targeted

  • Off the Eaten Path's tagline: "Snacks for the curious".
  • Snacking and convenience foods are popular among busy consumers.
  • Pepsi Co. used data analytics to derive consumer insights and build "true consumer intimacy".
  • The chips were introduced by Pepsi Co. at Expo West.
  • Off the Beaten Path was stocked in Walmart's sample dispensing kiosk.
  • There were no TV commercials created (as evident on its YouTube channel). Digital banner ads for the brand largely communicate that the product is made of real vegetables or that it is free of "colors, flavors, and preservatives".

Social Media

  • Off the Eaten Path partnered with Jules Hunt, an influencer, to position the Off the Eaten Path as a brand that "can improve one's wellness".
  • The Instagram and Facebook photo posts show fit Caucasian and multicultural women eating Off the Eaten Path chips in both indoor and outdoor settings.
  • Social media hashtags: #KeepFeedingYourCurious, #snacksforthecurious, and #SnacksForSharing.

GATORADE BARS

  • The website can be found here.
  • Gatorade bars for athletes were launched in 2018.

The Product

  • Fuel bars for athletes: Pre-Workout Fuel Bar (2oz.) — Pre League; Prime Fuel Bar (1oz.) — Post League.

How They Targeted Millennials

  • Gatorade targeted millennial athletes across various sports such as "basketball, softball, soccer, flag football, and volleyball".
  • It aimed to introduce the brand to "8,000 players across five sports within a two-week window throughout the DC, MD, VA metro".
  • The digital marketing aimed to create exposure to the brand through one dedicated email, a minimum of two Facebook posts, and at least one Instagram post.
  • The mail was addressed to the leagues and contained the product's features and benefits and sampling information (pre-league sampling).
  • During the league matches, Gatorade set up tents, sideline banners, tablets, and sampling.
  • It also recorded the highlights of every game, which players could access upon registering.
Part
12
of thirteen
Part
12

Top Brands for Adults 25-45: Top Trusted Brands

Apple, Amazon, Target, Walmart, and Samsung are five of the most popular brands among United States adults between the ages of 25-45. Details of each company have been provided below.

Apple

  • Apple was selected as a top brand for United States adults between the ages of 25-45 given that the brand was consistently selected as a favorite brand of American millennials across multiple recent research studies.
  • Specifically, Apple was highlighted as a favorite brand for American millennials within the most recent YouGov BrandIndex which identified Apple as the eighth-favorite brand, a 2018 report by Moosylvania which identified Apple as the second-favorite brand, and the subsequent 2019 study by Moosylvania which also identified Apple as the second-favorite brand.
  • According to industry experts including Forbes and Digitalist Magazine, millennials like Apple because they feel connected with the company's values.
  • Corroborating this position, a recent report by MBLM found that Apple has built the "strongest emotional bond" with millennials of any company.
  • Meanwhile, Apple continues to attract this generation and inspire their loyalty through its highly effective marketing tactics and ongoing product innovation, keeping "customers on their feet."

Amazon

  • Amazon was similarly identified as a top brand for United States adults between the ages of 25-45 based on the YouGov BrandIndex as well as Moosylvania's 2018 and 2019 survey results, which reported Amazon as the fourth, third and first most popular brands, respectively, among this cohort.
  • Additionally, recent research by Cowen & Co. found that Amazon is the "clear preferred shopping destination" for this age group and that the company was "instrumental" in all steps related to researching, finding and purchasing new items for United States millennials.
  • Perhaps even more strikingly, a survey published in Vice found that 44% of millennials would rather "give up sex for a year" than stop shopping with Amazon.
  • Notably, this generation can't resist the convenience and efficiency of satisfying all of their retail needs in one place, despite the fact that Amazon's capitalistic underpinnings may go against their ethical and political ideologies.
  • Meanwhile, Amazon continues to engender the loyalty of American millennials through its extensive marketing efforts, including live-streaming advertisements on Twitch, curated deals and experiential advertising.

Target

  • Target was also determined to be a top brand for American millennials based on the YouGov BrandIndex as well as Moosylvania's 2018 and 2019 survey results, which reported Target as the thirteenth, fourth and fifth most popular brands, respectively, among this cohort.
  • Business Insider asserts that millennials are devoted to Target because the brand combines style with affordability in its product offerings, while also taking action related to social concerns, such as by introducing non-gender conforming aisles.
  • Additionally, the retailer continues to fight for market share within this generation through a variety of strategic initiatives, including new partnerships with eCommerce merchants as well as the introduction of minimalist brands throughout its retail channels.

Walmart

  • Walmart was similarly identified as a top brand for United States adults between the ages of 25-45 based on the YouGov BrandIndex as well as Moosylvania's 2018 and 2019 survey results, which reported Walmart as the sixth, fifth and fourth most popular brands, respectively, among this cohort.
  • According to Business Insider, Walmart's low prices and diverse selection of goods make it a "fan favorite" of this generation.
  • Meanwhile, per CBS News, millennials have become a "serious focus" for Walmart as it looks to grow its business. The company is actively appealing to this generation by partnering with digital brands, introducing more private label products, rolling out its InHome Delivery service, and recruiting younger talent to work in stores and within corporate roles.

Samsung

  • Finally, Samsung was determined to be a top brand for American millennials based on the YouGov BrandIndex as well as Moosylvania's 2018 and 2019 survey results, which reported Samsung as the eleventh, sixth and sixth most popular brands, respectively, among this cohort.
  • Business Insider asserts that this generation favors Samsung because the company's products are "sleek, stylish and high-tech."
  • Moreover, according to experts including Investopedia, PYMNTS, and BGR, Samsung is working to reinforce this appeal and attract a greater share of United States millennial spending by revamping its mid-range product lines to offer "cutting-edge features" at more affordable prices.

Research Strategy

In an effort to identify the top brands for adults between the ages of 25 and 45, we began by looking for surveys that provided insights into this topic. However, we quickly found that this is not an age bracket that is typically studied and most surveys broke down the data by generation rather than a specific age group. Using Pew Research's we determined that millennials would be between the ages of 23 and 38 in 2019 and will be between the ages of 24 and 39 in 2020. Due to these findings, we decided to use millennials as a reasonable representation of the requested age bracket.
Part
13
of thirteen
Part
13

Top Brands for Adults 25-45: Top Least Trusted Brands

McDonald's, Campbell's Soup, Sam Adams, Macy's, and Newman's Own are some brands that millennials are least interested in. These brands were big in previous generations but have been unable to grow. They have either stagnated or are dwindling.

McDonald's

Campbell's Soup

  • Campbell's Soup is primarily known for its soup although it offers other food items such as crackers and cookies. It is a canned-foods brand that also sells beverages.
  • Processed foods are becoming less and less popular. Although this may be a good thing, millennials believe that everything in a can is not healthy.
  • Millennials are focused on healthy eating. One meal that is associated with them is the avocado toast. Millennials are mainly rejecting this brand because of its chemical additives.
  • Campbell’s Soup's retro branding appeals more to baby boomers and Gen Xers. Canned soup has minimal appeal to millennials. Additionally, the labels of chemical ingredients on the side of the can are off-putting.

Sam Adams

Macy's

Newman's Own

Research Strategy

Our research could not to find insights for adults between 25 and 45 years old. For this reason, the research team has expanded scope to provide insights focusing on millennials. According to a 2019 Pew Research, the age bracket for millennials is 23 to 38 years old. For this reason, we have confidence that these insights reflect the majority of the age bracket in this request.
Sources
Sources

From Part 11
From Part 12