Notice how some young, wealthy individuals are claiming fewer bragging rights and becoming more frugal? A greater number of Millennials are adopting more risk-averse behavior.
A high percentage of individuals in this group, ranging from 18 to 34 years old, are gravitating to more conservative, financial investment vehicles and strategies compared to older investors, according to last year’s Merrill Lynch Affluent Insights Quarterly
survey, which questioned a sample of 1000 affluent Americans with investable assets of more than $250,000.
“It is understandable that younger investors who have experienced or witnessed the market swings during the past decade and the impact they may have had on their family would be skeptical about more moderate or aggressive investment strategies,” said Sallie Krawcheck, president of Bank of America Global Wealth and Investment Management in the survey’s press release.
Now, more wealthy parents emphasize financial “know-how” to their children. According to the review, two out of five respondents are spending more time speaking to their children about financial matters, and 74 percent have shared some form of the advice offered from their advisor, such as managing a budget, investing for retirement and managing checking or saving accounts.
Avoiding financial investments or taking a more conservative approach at a younger age can damage the asset growth sought during the long-stretch, warned Krawcheck. “It is our job as advisors and as an industry to help restore investor confidence so that risk aversion doesn’t leave the next generation of investors inadequately prepared for the future,” she advised.
How have you noticed wealthy individuals show risk aversion with their investments?
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