"Across the board, Generation Y is proving to be radically different from other generations in how they manage their finances," said Chris Moloney, Scottrade’s chief marketing officer and executive director of customer intelligence. "Older generations see investing as more of an obligation or necessity, but Gen Y truly finds it fun. This attitude explains Gen Y’s pronounced trend toward being the generation that is the most involved in managing their own investments."
In line with findings from past surveys, Gen Y leads the generations in managing their investments, with almost 40 percent making all of their investment decisions on their own. However, this year’s survey shows that Gen Y is by far the generation leader in taking new actions to aggressively manage its investments.
"Gen Y is blazing a path of financial proactivity," Moloney said. "“In the wake of the past year’s economic setbacks, many investors across all generations are taking new measures to more actively manage their investments, but when given a list of new activities, Gen Y leads in eight out of nine actions. The economic climate has made this a generation of enthusiastic, involved investors even more inclined to act. They are much more optimistic and active than other generations."
Bullish, Yet Cautious
In addition to being more active in managing their investments than older generations, Gen Y’s attitude toward the economic environment is also the most bullish. More Gen Yers (24 percent) increased their 401(k) and/or IRA contributions in the last year than any other generation, and they are by far the most likely to plan to invest more money in the coming year.
Gen Y was also the most confident that it would recoup its losses quickly, with half of investors expecting to recover fully in less than two years. Forty percent believe that their portfolios will be up this year versus last year. For other generations, that number was 28 percent or lower.
“Despite their enthusiasm to invest, and their bullishness about the economy and their personal recoveries, Gen Yers are surprisingly conservative investors," Moloney said. "Their youth and optimism don’t translate into recklessness or risk."
More than any other generation, Gen Y says that they are being more cautious and conservative with their investments due to concerns about the economic climate (36 percent for Gen Y; 29 percent or lower for other generations).
"Part of being cautious is doing due diligence before investing," Moloney said. "As the do-it-yourself investing leader, Gen Y is used to doing their homework. They are perpetually attached to the Internet and use it constantly for financial research. They lead the generations in rating online research as the most important resource for investing information."
Moving Toward Mobile Investing
As iPhones and other smart phones increasingly become convenient conduits for information, technology-savvy Gen Y is quickly embracing them as tools to support their growing desire to stay connected to their financial lives. While fewer than one-third (31 percent) of overall investors own a mobile phone or other device that they use to access the Internet, more than half (56 percent) of Gen Y investors do.
Of those Gen Yers who access the Internet with a mobile device, one quarter use it to get stock quotes, and 16 percent use it to buy or sell securities. In fact, 35 percent of these Gen Y mobile users make half or more of their trades on a mobile device.
"When you see a Gen Yer on their iPhone, they're not all on Facebook or Twitter; many are checking stocks or investments while on the go," Moloney said. "Generation Y is a sizable generation. By some estimates, they number almost as many as the Boomer generation. And as the number of Gen Yers who become investors grows, so will their influence on the investing landscape. Gen Y represents a total sea change."
Scottrade is ready for the evolution of the investor. In June, the company launched its new mobile trading platform, Scottrade Mobile. In addition, Scottrade offers robust online resources and research, including a new online Knowledge Center that features almost 2,000 up-to-date educational articles and interactive tools and houses some of the most complete financial planning content available to the public.
"Our focus on customer service helps us stay in touch with our customers from all generations by making sure we offer the appropriate resources and tools they can use to effectively manage their investments," Moloney said. "We listen to our customers and continually work to deliver the new technology and service tools that they want as well as the information and education they need."
About the 2009 Scottrade American Investor Survey
The study was commissioned by Scottrade and conducted online with members of Survey Sampling Inc.’s SurveySpot consumer panel. Fielded with a nationally representative sample of 1,143 respondents between July 15 and July 29, 2009, the study examined attitudes, behaviors and trends related to investing. All participants were at least 18 years of age that were involved in making investment decisions in their households. Margin of error for the overall poll is +/- 3.1 percent at 95 percent confidence.
