Joe Ready, director of Institutional Retirement and Trust at Wells Fargo, discusses ideas to help Millennials move toward retirement. Wells Fargo Institutional Retirement & Trust is a business unit of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.

Part 1: How Millennials feel about money and retirement


Part 2: Helping Millennials move toward retirement


Part 1: How Millennials feel about money and retirement

Joe Ready: Although they may go in with more knowledge, they understand the importance of the decisions they are making. And so seven out of ten said they would find a financial coach really helpful.

Wayne Badorf: That’s Joe Ready, director of Institutional Retirement and Trust at Wells Fargo, talking about the Millennial generation. In this episode—the first of a two part conversation—Joe and I discuss findings of their 2016 retirement survey—particularly how Millennials feel about their money and retirement. I’m Wayne Badorf, and you’re listening to The Essential Practice podcast. Well, Joe, welcome.

Joe: Thanks, Wayne. I’m glad to be here.

Wayne: Well, I’m excited to really dig in to this study that your group published, the 2016 Wells Fargo Millennial Study (pdf). Maybe share a little bit with our audience about why you decided to conduct it and who are you focused on getting responses from.

Joe: You know one of the things, Wayne, we’ve learned is the Millennials are quickly emerging as the largest population in the workplace today, and their financial health has real future implications in our industry, in the workplace, and for social programs such as Social Security. So one of the things we were interested in learning is, you know, what are their challenges and what’s unique to their generation in terms of, you know, their needs financially. It’s really important we understand kind of who they are and what they’re worried about.

Wayne: And how many years have you been doing a study like this?

Joe: We’re over ten years now, Wayne. You know we’ve really used these studies to help shape our agenda in terms of, you know, how we develop products, how we can help them, how we can educate, provide advice—to help them really drive really good savings and investment habits. So it’s over ten years and the insights have just been fabulous for us.

Wayne: Well let’s get into some of those insights. I know within the publication that you ask Millennials how they felt about their financial standing—55% said they felt they were in a strong financial standing, but 44% responded that they didn’t feel so good. Now I wonder, what are some of the reasons that Millennials cited for not feeling they’re in such a strong financial standing?

Joe: There’s a number of factors that really contribute to this sort of sentiment. One is there’s this underemployment concept, if you will.

Wayne: Ok.

Joe: It’s been difficult as these Millennials have graduated school, you know, it’s been a difficult job market, almost half define that they’re living paycheck to paycheck. Which, as a result, more than half say they’re just stretched way too thin to save for retirement. One of the big overhangs that’s been talked about a lot is over a third have student loan debt. And the median amount of student loan debt—and this really surprised me—was just a little bit shy of $20,000. And when you drilled into it a little bit, three out of four said that this student loan debt is unmanageable.

Wayne: So when you bring up the idea of retirement and planning for the future, is that something this generation is even thinking about? Or, is it just so far off for them that it’s hard for them to consider?

Joe: Some of the results in that question are mixed, right? You know one of the broad sentiments that we find is this group said they’d like to retire at the ripe old age of 59. So, you know, maybe for them, you know, they don’t think it’s as far off. One of the most popular things we’ve uncovered is, they’ll say, “Well, we’ll kick the can down the road,” right?  “I’m early in my earnings, I don’t make as much money as I was hoping to make, I had these competing priorities including the student loan debt. You know, geez, if I just wait a short period of time in my early 30s, it’s not a big deal and when I make more, I’ll sort of start my savings.” 41%, or four out of ten, haven’t even started saving yet for retirement. And I want to press a little bit on this “kick the can down the road” concept because I think it illustrates some of the key points you can make about the Millennials really not sort of exercising their biggest asset, which is this power of time.

Wayne: Oh, good point.

Joe: We said hey if you were to delay savings from age 23 to just 32, you know, nine years, and I think most of them look at it and say, “Well I’m 32. I still have 30 years of savings and investing.” If you sort of do the math on normal salary, normal savings rates, you know, they’ll have 51% less. And I think that’s a real eye opener for this Millennial group.

This generation though, they understand the importance of a retirement plan and the importance of trying to get started. I think, you know, they’ve grown up in a generation where they do realize that a 401k … they might not quite understand it. But it’s a little bit like healthcare, they know they have to have it.  A lot of them are being automatically enrolled in the plans. And so they know they need to do it. It’s about trying to make sure they get in the game as early as possible. Start a good savings behavior on the savings rate is really the key message we’re trying to give them, and that’s going to depend on how we can help them deal with these competing priorities, in terms of how they felt, relative to their financial outlook.

Wayne: Interesting. Now for Millennials who are planning for their future, did you learn anything about where they likely go for resources to help them?

Joe: It’s actually interesting that the number one answer Millennials gave in terms of where they seek help. 71% say they would value a financial coach. And we were thoughtful about how we worded that question to help them understand the complexities of a retirement plan. What they’re saying is, “We may Google and seek information on our own, but we would really value someone to collaborate our decisioning for me.” Because they are unsure, they are young in the workplace, they’re young in the savings and investment perspective. Although they may go in with more knowledge, they understand the importance of the decisions they’re making and so seven out of ten said they would find a financial coach really helpful.

Interestingly enough, 16% said they are extremely or very interested in the use of a digital advisory service for financial planning. I think what we were learning there is it’s not one or the other, it’s both, right?  So, you know, “I want to get my information digitally. I wouldn’t mind getting updates digitally, maybe performance information digitally, but boy, I do still want to talk to somebody about what are really important financial decisions.”

Wayne: Joe, this has been a great conversation, really digging into what the study has told us about Millennials and kind of where they’re at. And we’re going to put a wrap to this discussion. And in our next discussion [talking about Millennials] really looking forward to now moving forward in their lives and how they can approach their futures.

Joe: Great Wayne, thanks for having me, I appreciate it, thank you.

Part 2: Helping Millennials move toward retirement

 Joe Ready: You know, I’ll say, one of the things is this generation will rapidly become your future customer base. There’s plenty here for advisors to provide help with this generation—they welcome it, and I think it can really help them drive better outcomes.

Wayne Badorf: That’s Joe Ready, director of Institutional Retirement and Trust at Wells Fargo. In this episode—the second of a two part conversation—Joe and I are talking about how advisors can help the Millennial generation move forward in their lives and approach their future based on the information and insight in Wells Fargo’s 2016 retirement survey. I’m Wayne Badorf, and you’re listening to The Essential Practice podcast. Joe, welcome back.

Joe: Great, Wayne, glad to be back again.

Wayne: Well, Joe, this part of our conversation really deals with kind of moving forward and what you learned about Millennials as they approach their future and around their careers. And one of the interesting thoughts and concepts that came out of the study—many times we hear the term sandwich generation, and I think of baby boomers who are providing care for both their parents and their children in many cases, but I found it interesting in the study to hear that there are Millennials who are either currently providing support or expect to provide support for older generations. And I wonder if you can expand upon that?

Joe: I can, and you know Wayne that’s a really important observation. I mean I was very surprised by it as well where 14% of millennials said that they’re providing support for two or more generations. So you think about this longevity issue, they are probably one of the first generations that are watching their aging grandparents and now their aging parents, given this longevity issue. And so they’re getting sort of a firsthand view of some complexities there whether they be, you know, sort of the social side of it or the financial side of it. And so that’s something we’ve got to keep in mind as we think about, you know, the competing dollars for, you know, how we think about getting them to save and invest and how they worry about other competing priorities.

Wayne: How does that really impact the Millennials’ viewpoint of their own future and planning for their own future because they have many obligations that they’re trying to handle?

Joe: It’s not only—and this comes through in this survey, but in the sentiment that we see consistently in other surveys we’ve done is—they understand that, you know, their own retirement security outcome, they own it. So they get it. Again I think that the challenge and they see it is, you know, how do I juggle these competing priorities, right?  Which, as we talked about student loan debt in the prior podcast, we talk about aging parents and how I might have to care for them, as well as gee I own the funding for my own retirement. So those are all important attributes that I think this generation is really sensitive to. It’s about helping them sort of figure that out.

Wayne: That’s a great point. Let’s talk about how they approach their career, and I wonder if we can turn our attention to this concept that came out in the study around job satisfaction. And I thought this study revealed some interesting insight into how Millennials view finding the right job versus any job.

Joe: Perfect. Well, a couple of points there. One 44% described themselves as fully employed in their preferred career so I step back and say well that means 56% are not, right?

And actually for the younger group, 20 to 25—and it kind of gets to concern they have about finding their perfect job—only 36% that are age 20 to 25, you know, find themselves in their preferred career. Interestingly enough I think it was almost 70% said that, the preferred job is more important to them from a career standpoint than over income.

The other thing that was interesting is, you know, stability. You know we talk a lot about this generation and job hopping if you will, right, to sort of either find that job or maybe it’s, you know, for career advancement or income. On average this generation has already worked for 4.8 employers. Interestingly enough four out of ten said they’d like to spend their whole career with one employer. So again some of the myths there. This group is looking for some stability.

Wayne: But 4.8 employers already, by switching employers, it could have an impact on how they might save for their future and especially retirement. What are some of those impacts that they might need to consider or have an impact on them by switching employers?

Joe: One of the things we find out is if they’re with an employer that happens to offer a 401k plan or type benefit, a lot of them take the money and cash out when they leave the employer so, you know, one of the biggest concerns is, “Well, gee, it’s not a lot of money. I’ve accumulated $5,000. I’ve been at this job over a year. I’ve got these competing priorities—I want to buy a new car, etc.” They cash out, and that’s really detrimental. They start to sort of lose that power of time on that asset. They lose the company match potentially at a company. So, you know, there’s a number of considerations as they kind of keep switching these jobs, not the least of which is what do the benefit programs  look like that might help them get on the path to retirement saving where they do have a work place plan. What we have found, at least right now, may be detrimental to their sort or savings and investment habits.

Wayne: Well the good news is this generation recognizes the need to save. They understand the value in doing it, so hopefully they will be able to reconcile, if or when they do switch employers, how to best really take advantage of those programs that are in place and to lever them.

Joe: No question. I totally agree with that.

Wayne: Are there any parting words you have for our financial advisor listeners?

Joe: Yeah, I’ll say, you know one of the things is this generation is going to rapidly become your future customer base.  So, you know, it’s a large part of the work force today, a large part of the population, and they understand the importance of saving. You know their preferences sometimes gets stereotyped. We talked about the value they place on collaboration combined with digital. And most importantly, help them leverage their biggest asset which is focus on what they can control, which is save early and save as much as they can. You know we try and drive the 10% because, you know, markets are going to ebb and flow, things are going to change. So I think there is, you know, plenty here for advisors to provide help with this generation. They welcome it, and I think it can really help them drive better outcomes.

Wayne: Great, well thank you so much for joining us today.

Joe: Great, thanks for having me Wayne. I appreciate it.

Wayne: For those of you listening I’d like to leave you with a couple parting thoughts of my own. One, is how much we value our partnerships and insight we have across Wells Fargo—we’ll continue to provide you access to industry insights, like what you’ve been hearing in these two interviews with Joe Ready. And second is how much we value you taking time to listen to us—we’re continually surprised by how many of you are out there! To you, we say thank you for being with us. And until next time, I’m Wayne Badorf, and this is The Essential Practice podcast, take care.


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