Bank of America today announced findings from the latest Merrill Edge® Report, which reveals people are feeling simultaneously optimistic and overwhelmed by their finances. Merrill is committed to empowering clients and helping them plan for the future at every age and in every stage of their financial lives through a combination of tools, people and know-how across Merrill Edge Self-Directed, Merrill Guided Investing, and Merrill Lynch Wealth Management.
The report is a biannual study of more than 1,000 mass affluent1 Americans’ evolving financial concerns and priorities. It found that 85 percent believe how they manage their finances today would make their parents proud. This may be thanks to savvier spending habits and the fact that 85 percent of Americans improved their financial lives in meaningful ways in the last year:
While Americans are becoming more conscientious about money and mindful of their spending, many report that their financial life weighs heavily on their minds, affecting both their mental (59 percent) and physical (56 percent) health – even more so among today’s younger generations and women of all ages:
The study found that 51 percent are worried about their finances over the next five years, with top concerns including the potential for an inadequate amount of savings (55 percent), political instability (53 percent), a looming recession (47 percent), and market volatility (45 percent). Another source of worry – debt (39 percent):
“On the bright side, Americans are prioritizing their financial goals, and taking steps towards improving their futures,” said Aron Levine, head of Consumer Banking and Investments for Bank of America. “However, many find managing their money today causes them a great deal of stress. The key is to find the right balance of short- and long-term planning, and always to take steps forward without placing a heavy burden on one’s current financial situation or well-being.”
Hypothetically, if given the choice to never have to manage their personal finances again, Americans would rather:
Perhaps the need to tackle debt and overcome the stress from their finances are why 55 percent of respondents are currently turning to professional financial guidance, either in person or online, and why two-thirds plan to do so in the future. A growing number are also embracing new technology and financial apps to help save and manage their money, including consumer banking apps (71 percent), money transfer apps (65 percent), personal finance apps (63 percent), and automated investment apps (57 percent).
Meanwhile, in the midst of the largest generational wealth transfer in history, many Americans (39 percent) expect to inherit or already have inherited all or part of their family’s estate, including cash (68 percent), personal property (57 percent), real estate (53 percent), and securities (41 percent). In fact, 58 percent of Americans believe their financial stability and lifestyle would benefit significantly or only be made possible by an inheritance from their family.
The good news is 92 percent plan to leave money and other assets behind, mainly to their children (59 percent), spouse/partner (54 percent), siblings (17 percent), and nonprofit organizations (17 percent). However, that doesn’t necessarily mean they have a plan in place to do so.
“Creating a long-term financial plan with reasonable, achievable goals along the way is important,” said David Poole, Consumer Investments Solutions and Client Services executive at Bank of America. “This can help Americans find a balance between living the lifestyle they want now, while working toward major milestones and leaving a legacy for their children.”
For more in-depth information about the financial behaviors and priorities of mass affluent Americans, read the entire Spring 2019 Merrill Edge Report.
Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 66 million consumer and small business clients with approximately 4,400 retail financial centers, including approximately 1,800 lending centers, 2,200 financial centers with a Consumer Investment Financial Solutions Advisor, and 1,500 business centers; approximately 16,400 ATMs; and award-winning digital banking with more than 37 million active users, including over 27 million mobile users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and approximately 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.
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Susan Atran, Bank of America
Matt Card, Bank of America
1 Merrill Edge Survey Methodology
Concentrix (an independent market research company) conducted a nationally representative, panel-sample online survey on behalf of Merrill Edge April 17-May 9, 2019. The survey consisted of 1,000 mass affluent respondents throughout the U.S. Respondents in the study were defined as aged 18 to 23 (Gen Z) with investable assets between $50,000 and $250,000 or those aged 18 to 23 who have investable assets between $20,000 and $50,000 with an annual income of at least $50,000; or aged 24-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 such as a 401(k), 403(B), and Roth IRA, but excluding primary home and other real estate investments. We conducted an oversampling of 300 mass affluents in Atlanta. The margin of error is +/- 3.1 percent for the national sample and about +/- 5.6 percent for the oversample market, reported at a 95 percent confidence level.