Article / 20 September 2017 at 13:30 GMT

Millennials – a new investor group with new needs

Director, Europe / The Options Industry Council (OIC)
United Kingdom
  • Millennials are different – 60% have investment accounts
  • 46% see themselves as savers, as opposed to investors
  • Generation worry – 40% fret about their finances
  • Millennials will enjoy the biggest transfer of wealth in history

Hipsters in Stockholm
 A generation of fiscally-conservative worriers poised for wealth. Pic: Shutterstock

By Gary Delany

Millennials are emerging as a distinct demographic to the investing community. Typically, they are in the 25-35 age range, as opposed to Generation X (36-51 years old) and baby boomers (52-70 years old). A 2016 study by Fidelity Investments shows that 60% of millennials interviewed had investment accounts and had started saving for retirement or an emergency fund. The study shows that 46% saw themselves as savers as compared to only 9% who saw themselves as investors. Finally, 40% of those interviewed worried about the state of their finances.

A panel on millennials at this year’s Options Industry Conference in the US estimated that they will take place in the largest transfer of wealth ever as previous generations hand down their wealth. To hear more about these insights, the panel audio is available on the Options Insider Radio website.

Millennials are now the largest living generation in the US (see chart below). A 2015 LinkedIn and Ipsos research paper estimated that millennials would receive at least a $59 trillion transfer in personal wealth by 2022, and a 2016 report by Standard & Poor’s estimated that in the US by 2020 they could account for 30% of retail sales.

Pew Research
The Options Industry Conference panel also noted that millennials may have a short attention span, so information needs to be concise and visually appealing. As the first generation of ‘Internet natives’, millennials are skilled at using social media to acquire knowledge and validate what they learn.

Options are a complicated financial product, but option knowledge can be made digestible and accessible. Millennials tend to be under-invested and have limited collateral, so options can be attractive as an income generation tool, as a defensive weapon and as a leveraged investment.

Millennial attitudes

Research by Forbes found that millennials are more like their grandparents in the so-called ‘Greatest Generation’ (born approximately 1900 – 1925) than their baby-boomer parents, being more cautious, questioning and wary of debt. This may be because many of them experienced at first-hand the financial challenges stemming from the 2008 financial crisis, mirroring those of their grandparents following the 1929 crash. In the US and the UK, millennials are carrying more student debt. In general, they have had a more challenging environment in which to start their careers. 

A 2017 Deloitte study of 8,000 millennials in 30 countries found that they were concerned about global uncertainty and were cautious, even pessimistic, about the future. The 2016 Standard & Poor’s report cited above also found that millennials were fiscally conservative, with 50% of their assets in cash, 30% in equities and 15% in fixed income.

A study on Facebook IQ, Millennials + Money: The Unfiltered Journey, stresses millennials’ responsible debt management and credit card usage, as well as their desire for financial advice delivered in a new way, more akin to a social media partnership. Fifty-seven percent of millennials prefer to pay by cash rather than credit card, more than twice the proportion for Generation X. Eighty-six percent of millennials are saving. Twenty-four percent of millennials do not feel that they know enough about investing. Only 32% of them feel that their bank understands them.

Financial education valued

Millennials understand the importance of financial education. A study by Bank of America Merrill Lynch found that millennials were more appreciative of financial education offered by their companies than the previous generations, at 92% (for baby boomers, only 76% valued similar education). 

As the CFA Institute noted in a March 2017 comment, millennials are tech-savvy and prefer virtual communication. They actively use social media for decision validation. This is a double-edged sword, amplifying both good and bad experiences, so millennials are likely to be attracted by robo-advisers who can offer products tailored to their needs. 

Those interviewed by the CFA Institute felt that the investment industry needed to better articulate the value of investment management. The study also found that the traditional view of retirement was morphing into that of managing lifetime wealth. Finally, it found that millennials were more socially conscious and thus more receptive to products focusing on environmental or social improvements.

With the growing importance of millennials in mind, OIC has launched a series of short videos focusing on educating investors, including millennials, on the responsible use of options. Check them out on OIC’s YouTube channel.

Where do we go from here?

How should financial firms react to the opportunity of attracting millennials to become investors? In my personal view, I believe that the following avenues should be considered:

  • Millennials are Internet natives who actively use social media for discovering knowledge and validating it.
  • They are interested in entrusting their money to ‘partner’ organisations.
  • Education is valued. Keep it short, concise, easily accessible and visually attractive.
  • Millennials are often fiscally conservative. This means, for example, keeping option strategies simple, and explaining the pros and cons.

In conclusion then, a combination of demographics, internet delivery and a challenging economic climate has given millennials many shared beliefs, which today’s financial services companies need to successfully address in order to attract this key market segment.

OIC and Saxo Bank have online education initiatives, which enable investors to increase their option knowledge and skills using easily accessible and easily digested content. For OIC’s comprehensive website, go to and follow us on social media.

Saxo Bank’s extensive educational initiatives can be found here

— Edited by Clare MacCarthy

Gary Delany is European director of the Options Industry Council (OIC)

Options involve risk and are not suitable for all investors. Individuals should not enter into Options transactions until they have read and understood the risk disclosure document, Characteristics and Risks of Standardized Options, which may be obtained from your broker, from any exchange on which options are traded or by visiting This article is intended for educational purposes only and none of the information in this post should be construed as investment advice or an endorsement, recommendation or solicitation to buy, hold or sell securities, including options . ©2017 The Options Industry Council. All rights reserved.
The opinions expressed are the author’s own.

About OIC
The Options Industry Council (OIC) is an industry resource funded by OCC, the world’s largest equity derivatives clearing organization, and the U.S. options exchanges. The mission of OIC is to increase awareness, understanding and responsible use of exchange-listed options among a global audience of investors, including individuals, financial advisors and institutional managers, by providing independent and unbiased education combined with practical expertise. Learn more about OIC at

Georgio Stoev Georgio Stoev
Great article Gary!


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