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Millennials Most Trusted Financial Source? Not Advisors

A new study finds that financial advisors are Americans’ most valuable source of financial advice — but not for Millennials.

When employees were asked about their most valuable source of financial advice, financial advisors are considered the most valuable source of financial advice — named by 30%. The national study found that employees of every generation list general news outlets as their most frequently used source of advice (26%), while search engines and financial news follow closely as frequently used sources, with a quarter of respondents listing each of these as a most frequently used source.

Not so when it comes to Millennials; 23% say they use their parents’ financial advice most frequently, and one quarter cite it as their most valuable source of advice. One-quarter of Millennials use financial websites daily or weekly, and 13% cite this as their most valuable source of financial advice.

The paper, “Filling the financial knowledge gap for all generations”, prepared by the Principal Financial Group and the Center for Generational Kinetics, found that 33% of Millennials don’t currently work with an advisor because they believe they do not have enough money. Another 18% say the reason they don’t work with a financial advisor is because they don’t know where or how to find a good one.

‘Open’ Minds?

The study acknowledges that Millennials use professional financial advisors less frequently than Boomers, but seem to be much more open to discussing personal finances with them. The study found that 67% of Millennials say they are comfortable discussing personal finances with a financial advisor, compared to 59% of Boomers.

After getting financial advice, 46% of Millennials say they will discuss it with friends or family before   acting on it compared to 20% of Boomers. On the other hand, 44% of Boomers say they will research on their own to verify the advice, while only 27% of Millennials will do this.

Their openness in discussing personal finance extends beyond professionals — while only 26% of Boomers say they are comfortable discussing their personal finances with close friends, twice as many (51%) of Millennials express comfort with this idea (weirdly, 31% of the Millennials say they would be comfortable discussing their personal finances with the President — as would 15% of Boomers). Two-thirds (68%) of Millennials say they are comfortable discussing personal finances with parents, compared to only 35% of Boomers.

This research study was commissioned by Principal Financial Group and conducted by The Center for Generational Kinetics. The survey was administered to 1,203 U.S. adults ages 22-70, with a 20% oversample of Millennials, ages 22-39. Respondents were full-time employees with a minimum household income of $30,000 and the eligibility to participate in their employer’s 401(k) plan.

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