RIA Rising

MFS Poll: Gen Y distrusts stocks but works with advisors

You’ve heard about the optimism of youth, but a survey released today by MFS Investment Management suggests that Generation Y—the age group it defines between 18 and 30—takes a darker view of life, at least as far as some aspects of investing are concerned.

Of those 232 Gen Y folk who participated in an online survey between May 31 and June 7—well before the market tanked in August— 40 percent said they agreed with the statement, “I will never feel comfortable investing in the stock market.” Thirty-eight percent say they can’t save consistently because they live from paycheck to paycheck, and 59 percent consider themselves to be more savers than investors.

But MFS found some good news for financial advisors; of the Gen Y investors who reviewed or rebalanced their portfolio in the previous 12 months, 89 percent said an advisor played a key role. MFS said 69 percent reported consulting with advisors regarding investment decisions, and 49 percent felt their need for investment advice had grown in the previous year.

Research Collaborative performed the survey for MFS, polling 974 individuals across multiple age ranges, with $100,000 or more in investable assets. The results appear to square with a poll of Gen Y conducted in 2009 by MetLife in which 40 percent of respondents said they weren’t saving for retirement at all.

The experiences of younger investors have been molded by dismal experiences, says William Finnegan, senior managing director of U.S. retail marketing for MFS. “Many Gen Ys reached investing age during the ‘dot-com’ bust, lived through 2008’s Great Recession, and continue to experience significant economic uncertainty and market volatility today,” Finnegan said in a release on the results.

The irony, of course, is that investors in the Gen Y age bracket are in the best position to invest in equities. Their youth allows more time to repair investment choices that go poorly, while the good choices enjoy greater appreciation over a longer time frame than those investments that are held by older investors who are closer to retirement.

Gen Y respondents still report being engaged with investing; 62 percent said they enjoy it, and 39 percent consider themselves “very knowledgeable/expert investors,” MFS said.

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