Millennials and baby boomers may have different levels of trust in financial services and engage banks and advisors in very different ways, but when it comes to investing, they're more alike than many think. According to research from TD Ameritrade, the investing habits of both generations are fairly similar. Among the top 10 stocks held by millennials and boomers, eight overlap, with Apple taking up 9 percent of boomers' portfolios and 11.4 percent of Millennials. The other firms in common include: General Electric, Intel, Bank of America, Microsoft, Facebook, Berkshire Hathaway and Exxon Mobile - perhaps not surprising as those large cap stocks tend to dominate many index-based mutual funds invested in by old and young alike. It's in the differences where the generations show their age. Rounding out the top 10 for baby boomers is AT&T and Johnson & Johnson, while Millennials invest more in Alibaba and Tesla.
According to a recent National Bureau of Economic Research paper, plan sponsors that allow participants to borrow against their retirement account multiple times increases both the total amount participants borrow, and the default rate, but not by much, according to PlanSponsor. The researchers found 20 percent of participants are borrowing from plans at any given time. Default rates are 10 percent, unless the worker leaves the plan with a loan, when the number rises to 86 percent: Those in plans that allow multiple loans have a default rate 1.7 percentage points higher. Total leakage from defaults is $6 billion – far less than is lost from workers who prematurely cash out of their plans.
On Wednesday, the SEC’s Investment Management division released cybersecurity guidelines for registered investment advisors. Firms should have a strategy that includes written policies and procedures for mitigating cyberattacks and periodic assessments of their security infrastructure. The IM Division also warned that advisors could face regulatory action if they fail to implement sufficient controls and policies. To stay out of trouble, the guidance recommended advisors treat cybersecurity as a compliance issue, as an attack could lead to identify theft, fraud and a disruption of business continuity.
Morningstar is the latest financial services firm to launch an app for Apple Watch. The new app is an extension of the firm’s iPhone app and provides global market data and market-moving news. It also includes Morningstar’s U.S. Market Barometer, an instant, visual depiction of market activity. Some financial firms are betting that the wrist will be the next place customers expect to keep connected to their money and the markets.