Client Service August 20, 2018

Millennials Open to Investment Advice and Help Planning for Retirement

Asked what they look for in an adviser, Millennials say experience, followed by someone with similar demographic qualities as themselves.

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Two-thirds of Millennials are saving for retirement, Broadridge Financial Solutions learned in a survey. However, 69% are not working with an adviser.

Millennials prefer in-person meetings with advisers, with only 17% considering texting and only 9% thinking that social media are trust-building communications.

Sixty-seven percent of Millennials would like to hear from their adviser at least once a month, and 28% prefer contact either on a daily or weekly basis. Only 20% of Millennials whose parents have a financial adviser have met that adviser. Fifty-five percent would consider working with their parents’ financial adviser. However, Millennials trust retirement advice from friends and family over a financial professional or adviser.

Asked what they look for in an adviser, Millennials say experience, followed by someone with similar demographic qualities as themselves. Millennials are more confident investing in savings accounts than they are in workplace retirement plans, tax advantaged plans or real estate.

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While more than half of Millennials are interested in health savings accounts (HSAs), only 33% own one. Forty-three percent of Millennials are not familiar with HSAs.

“Millennials are open to receiving investment advice and planning for retirement,” says Cindy Dash, head of Broadridge’s Matrix Financial Solutions. “The results of the study show a clear opportunity for financial advisers to utilize technology-enabled solutions to better educate and communicate with all generations, including Millennials.

Broadridge’s findings are based on a survey conducted among 1,000 adults in July.

The Markets August 17, 2018

Strong One-Year Performance Posted by Pensions

Continuing the trend from the first quarter, corporate retirement funds and health care plans lagged during Q2 2018, according to BNY Mellon data.

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The second quarter 2018 update of the BNY Mellon U.S. Master Trust Universe index shows a median return of 0.63%, rebounding to positive performance after posting a negative first quarter result.

As the firm explains, the BNY Mellon U.S. Master Trust Universe offers peer comparisons of performance by pension plan type and size. It consists of 490 corporate, foundation, endowment, public, Taft-Hartley, and health care plans with a total a market value of more than $2.1 trillion and an average plan size of over $6.7 billion.

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This sizable group of plans posted a strong one-year return of 7.66%. According to the index, this figure surpasses the three-year annualized return of 6.70% while underperforming the five-year annualized return of 7.77%.  

For the shorter term, the index shows corporate and health care plans underperformed, with quarterly returns of 18 basis points, and 41 basis points, respectively.

“Endowments continued to benefit from higher allocations to alternatives and lower allocations to U.S. fixed income investments versus other plan types,” observes Frances Barney, head of asset owner product management and global risk solutions. “They overweighted alternatives at a 44% allocation versus 22% for the Master Trust Universe as a whole, and underweighted U.S. fixed income at 10% versus 28% for the whole.”

U.S. Equity was the top-performing asset class tracked by the index, posting a one-year gain of 14.39%. Real estate continued a run of positive annual returns (8.71%), and non-U.S. equity also finished the year with solid gains (8.21%)—despite dropping 2.30% in the second quarter.

U.S. fixed income had a median quarterly return of negative 0.12%, versus the Barclays Capital U.S. Aggregate Bond Index return of negative 0.16%. Non-U.S. fixed income had a median return of negative 5.52%, versus the FTSE World Government Bond Non-US Index return of negative 5.11%. Real estate had a median return of 2.21%, versus the NCREIF Property Index result of 1.81%.

Additional data and information are available on www.bnymellon.com.

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