Fidelity Research® Finds Gen Y Financial Perspective the “Most Changed” Following the 2008 Financial Crisis

Gen Y Feels More Confident than Older Generations Post-Crisis; Has Maintained a More Positive Outlook

BOSTON – While generations of consumers learned important lessons following the 2008 financial crunch and began seizing control of their finances, the younger generations, particularly Gen Y (born 1981-1988), learned more and have taken the most positive action post-crisis, according to findings that Fidelity Investments® released today from its “Five Years Later” study*.

The study, which examines the attitudes and behaviors of investors since the financial crisis began five years ago—a crisis that has been widely recognized as the worst since the Great Depression—reveals 81 percent of Gen Y now consider themselves more knowledgeable about their finances, compared to 66 percent of older generations. In addition, when it comes to confidence levels, Gen Y is faring better: 55 percent of Gen Y versus 47 percent of older generations feel more confident as investors. Additionally, 64 percent of Gen Y versus 54 percent of their elders now save more systematically.

“While the crisis served as a wake-up call for investors of all ages, this study found Gen Y may have experienced the most positive change,” said John Sweeney, executive vice president of Retirement and Investment Strategies at Fidelity Investments. “Gen Y remains surprisingly confident despite suffering investment losses, and especially given that many also saw the impact the crisis had on their parents, who were approaching or in retirement. Rather than over-reacting, Gen Y has taken a more deliberate approach to their finances, recognizing the need to assume control of their spending and investing habits, and showing a willingness to do things differently. These are important factors when it comes to weathering any financial challenge.”

“Generation Optimistic”
Overall, when comparing Gen Y against older generations, it clearly stands out as the most upbeat age group. Aside from feeling more confident as investors, 52 percent of Gen Y versus 41 percent of older respondents describe themselves as more confident in general, now that several years has passed since the financial crisis began.

That attitude includes a certain level of optimism about the broader economy and the stock market. In fact, 50 percent of Gen Y versus 30 percent of Gen X (born 1965-1980) say the economy is better now than it was five years ago. And 76 percent of Gen Y versus 56 percent of Boomers believes their investments have fared better since then.

How the Financial Crisis Influenced Gen Y Money Moves
The survey findings suggest Gen Y’s more optimistic outlook contributes to a different approach than older generations when it comes to making financial and investing decisions:

A more socialized financial experience – At the start of the financial crisis, Gen Y turned to family and friends for financial advice more than other generations (37 percent versus 23 percent of Gen X and 25 percent of Boomers). They were also more likely to conduct online research (34 percent) and use online tools and calculators (23 percent).

Emergency funding – Although 26 percent of Gen Y respondents said personal debt increased these past five years, 71 percent of respondents started to maintain an emergency fund and 48 percent increased their emergency savings. In comparison, while 21 percent of Boomers saw personal debt increase, slightly over half (52 percent) started to maintain an emergency fund and only 29 percent increased their emergency savings.

A focus on saving – Thirty-four percent of Gen Y respondents increased household liquid assets, and 39 percent of Gen Y increased contributions to a tax advantaged retirement savings account. Employer-sponsored retirement savings plans (32 percent), IRAs (21 percent), and personal real estate (29 percent) also have increased in importance for Gen Y.

“Time is the biggest driver of success for young investors, followed closely by savings rate, asset allocation, and finally, fund selection,” added Sweeney. “Time is a lever that uniquely belongs to young investors, and for Gen Y, time is on their side. This research indicates they are saving early and often, which is a critical element for a successful retirement roadmap. To maximize their potential, Gen Y is well positioned to apply their optimism and confidence when it comes to developing strong financial strategies. We believe all investors, including Gen Y, need a solid mix of investments to help provide income and growth potential over the long run.”

Resources for Young Investors to Get, and Stay, on the Right Track
Fidelity Investments provides investors of all ages with the financial intelligence they need to make informed decisions about their unique situations. For example, young investors can look to Viewpoints articles such as “Financial Checkup: Four Things to Do Now” and “Eight Tax-Smart Savings Tips” for financial guidance specific to their generational challenges.

For more information on the Fidelity Five Years Later Study, an executive summary and infographics can be found on Fidelity.com.

*About the Study
The Fidelity Five Years Later study was conducted online among 1,154 adult investors by GfK Public Affairs and Corporate Communication using GfK’s KnowledgePanel® during the period of February 12-25, 2013. KnowledgePanel is a nationally-representative online panel, in which potential panel members are chosen – unlike opt-in Internet panels – using a probability-based sampling method (ABS, or address-based sampling) covering 98 percent of the U.S. population. Sampled non-Internet households are provided a netbook and free Internet service. The qualified respondent is at least 25 years old, a financial decision maker for his/her household and holds investments other than simply a savings account or certificate of deposit.

About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $4.3 trillion, including managed assets of $1.8 trillion, as of July 31, 2013. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments, visit www.fidelity.com.

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