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Fall 2017 Merrill Edge Report

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1Research provided by BofA Merrill Lynch Global Research.

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Key findings from the fall 2017 Merrill Edge Report

On Dec. 1, 2017, Bank of America released the fall 2017 Merrill Edge Report, a biannual study that offers an in-depth perspective at the financial concerns, priorities and behaviors of mass affluent Americans. Findings include:


Millennials’ “do-it-myself” approach

Millennials appear to be more self-reliant than other generations

This fall, Merrill Edge learned millennials are embracing a “do-it-myself” mentality as they pursue financial independence and self-sufficiency. Thinking 20 years ahead and predicting what they can rely on financially, millennials believe they will be able to rely on their savings account (66 percent) – a self-created and self-funded source. In fact, this generation places greater trust in themselves than they do in their personal relationships with their significant other (57 percent), friends (56 percent) or 401(k) accounts (56 percent).

Adding to this, millennials are willing to make sacrificial day-to-day financial decisions to save more money in the long run, including:

  • Cutting back on going out (54 percent), compared to 45 percent of Gen Xers and 32 percent of baby boomers

  • Skipping vacation for a year (42 percent), compared to 39 percent of Gen Xers and 27 percent of baby boomers

  • Saving more than 50 percent of their salary (38 percent), compared to 19 percent of Gen Xers and 14 percent of baby boomers

On the contrary, older generations are more likely to depend on outside sources for financial security. When asked what they’ll be able to rely on in 20 years, 71 percent of Gen Xers report a 401(k) account while baby boomers report pensions (54 percent) and Social Security (50 percent).


A decade later, the Great Recession motivates younger generations

The Great Recession continues to play a role in how younger Americans plan for life milestones

After witnessing how the Great Recession impacted their elders, millennials believe they are more likely to “play it safe” with their day-to-day investments (85 percent) and their career (80 percent). This caution is less likely in other areas of their life including, their romantic life (73 percent) and travel (55 percent). They’re also most likely to see themselves as financially conservative compared to their parents (46 percent) and grandparents (35 percent).

The Great Recession plays a major role in how millennials plan for major life milestones. Most report it plays a role in their decision-making process when buying real estate (78 percent), pursuing education (58 percent) and having children (53 percent). This may be because 80 percent of millennials predict they will see another recession in their lifetime and three in 10 believe it will happen in the next five years.

However, they are not letting the Great Recession or potential future recessions hinder their financial futures. Compared to 10 years ago, the fall report found millennials feel more optimistic than other generations about their investment decisions:

  • More “responsible” (64 percent, compared to 54 percent of other generations).

  • More “forward-looking” (64 percent, compared to 52 percent of other generations).

  • More “successful” (54 percent, compared to 48 percent of other generations).


The definition of success is changing

Providing for family and making a difference means more than being a millionaire

Americans are changing the game and re-writing the rules about what it means to be successful. Today, Americans are prioritizing family and giving back to the community before personal accomplishments and money. The report found providing for family (73 percent), having a family (52 percent) and making a difference in the lives of those in need (41 percent) are most essential in defining success. On the contrary, only 9 percent of Americans say being a millionaire is essential to their definition of success.


Merrill Edge Report Methodology
Convergys (an independent market research company) conducted a nationally representative, panel-sample online survey on behalf of Merrill Edge Sept. 6-24, 2017. The survey consisted of 1,010 mass affluent respondents throughout the U.S. Respondents in the study were defined as aged 18 to 34 (millennials) with investable assets between $50,000 and $250,000 or those aged 18 to 34 who have investable assets between $20,000 and $50,000 with an annual income of at least $50,000; or aged 35-plus with investable assets between $50,000 and $250,000. For this purpose, investable assets consist of the value of all cash, savings, mutual funds, CDs, IRAs, stocks, bonds and all other types of investments excluding primary home and other real estate investments. We conducted an oversampling of 300 mass affluents in the following markets: Southern California, Dallas, Chicago, Atlanta, and Phoenix. An additional group of 205 Generation Z respondents was surveyed. The margin of error is +/- 3.1 percent for the national sample, about +/- 5.6 percent for the oversample markets, and +/- 6.8 percent for the Gen Z group, all reported at a 95 percent confidence level.

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© 2017 Bank of America Corporation. All rights reserved.


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Executive Biographies

  • Dean Athanasia, president of Preferred and Small Business Banking
  • Aron Levine, managing director and head of Consumer Banking and Merrill Edge, Bank of America

 

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