401K. Roth IRA. Contribution rates. Fund allocations. Investment strategies. Emergency funds. All phrases Millennials should be comfortable with. But are they?
According to a study* by CMB and PNC Investments, two-thirds of Millennials say their parents encouraged them to save, but only half say their families modeled good money management – even fewer say they were shown how to grow wealth (beyond having a job). I’m one of the lucky members of this generation as my parents provided me with a solid financial example as well as a quality financial education. But, as a Millennial, I can also attest to the fact that it can be difficult to plan for retirement – especially when balancing a mortgage, student loans and the numerous bills that come along with parenthood.
Millennials, Gen Z and Baby Boomers alike are worried about having enough savings for retirement and needing help with budgeting. A recent poll completed by MaritzCX shows that more than 60 percent of Millennials and Gen X worry they will need to continue working to pay bills rather than retire full time. The generational study encompassed 1,500 respondents comprised of 600 non-full-time student Millennials living on their own, 300 Gen Xers, 300 Baby Boomers and 300 in the Silent Generation.
“As this generation [Millennials] matures and acquires more wealth, it’s absolutely critical that they devise a comprehensive financial plan, which consists of an emergency fund, a mix of savings and investing and an intimate understanding of their future goals,” says Rich Ramassini, senior vice president and director of strategy and sales performance at PNC Investments.
Improving CX in the financial industry
A few months after graduating from college I began working with a financial planner. While the initial experience was great, she simply wasn’t a convenient long-term resource, so I stopped using her services and have worked more independently ever since, relying more on free financial planning apps and Internet research. My high expectation for CX is apparently common among Millennials. When choosing a firm for help with investing, 71 percent of Millennials cited CX as extremely or very important, as did 66 percent of Gen X.
“Across every industry, CX is playing a significant role as a differentiator in acquiring and maintaining customers,” said Aaron Fransen, vice president financial services at MaritzCX, in a press release. “When navigating complex and challenging pursuits, such as budgeting and understanding retirement saving needs, the stakes are even higher. CX is shown to be a main differentiator for customer selection, satisfaction and staying with a financial services firm.”
According to MaritzCX’s poll, 82 percent of Millennials (and 76 percent of Gen Xers) had interest in getting help with investing. And when selecting an investment firm or traditional bank for help, both reputation and customer experience matter.
My generation is looking for firms that differentiate themselves with their CX offerings. I look forward to seeing how the investment industry and traditional banks will research to truly understand what Millennials (and ultimately, Gen Z) are looking for in terms of value, convenience, customer services and innovation.
*Chadwick Martin Bailey designed the online survey, which was conducted in January among Millennials between the ages of 21 to 35 with investable assets of $5,000 or more or a 401(k) or 403(b) plan and at least $1,000 in investable assets.