ARLINGTON, VA: US millennials are so pessimistic about their financial situation that the financial services sector is at risk of losing them to alternative providers a new survey has claimed.
The Consumer Financial Monitor from CEB, the member-based advisory company polled 17,500 consumers across 24 markets, with the US trend measuring sentiment among key age and wealth groups. It found that the feelings of 18-29 year-olds about their personal finances had dropped 9% over the last six months with a knock-on effect on their trust in banks and on buying behaviours.
Providers need to rethink their service approach or risk an entire generation of disengaged customers, CEB declared, as it noted a decline across the board in millennials' financial planning, use of advisors and purchase of financial products.
"It is entirely conceivable that younger consumers may defer or even decline to purchase products such as mortgages, auto loans or investments central to the lives of previous generations," it said.
The extent of the problem was highlighted in the finding that a similar survey in 2012 had shown younger consumers to be the most satisfied with financial products, but two years later they were the least satisfied, and by a significant margin.
Historically, Generation X has been the more pessimistic of these two groups, but they are both now equally negative in their feelings about financial institutions and those feelings are translating into disengagement.
Millennials are now less likely to work with a financial advisor, keep a formal budget or plan for long-term goals than they were two years ago.
"Millennials want their banks to provide the same kind of customer experience that they receive through more agile consumer technology companies they rely on in other parts of their life," said Peter Aykens, CEB managing director.
"Right now, with some exceptions, non-banks are building superior offers," he added.
CEB recommended a focus on service to re-engage younger customers and a multichannel strategy designed to deliver a low-effort consumer experience.
Data sourced from PR Newswire; additional content by Warc staff