Millennials don’t know much about investing, a new study finds.
“Our research findings indicate many Ontario millennials are feeling overwhelmed by investing and don’t know where to start,” said Ontario Securities Commission (OSC) director of the investor office Tyler Fleming.
“We hope this work will facilitate the development of products and services that are responsive to younger investors’ needs and help foster innovation and efficiency in the capital markets.”
The OSC study, released July 12, offers insights on barriers to investing for Ontario millennials and how stakeholders can develop and refine products, programs and services that respond to millennials’ needs.
Many millennials are at a life stage where it’s difficult to picture one’s future self, the report finds, often comparing themselves to their peers, and are overwhelmed with too many options to know where to begin.
They also lack opportunity to practice their investing skills.
From these insights, the study identified six key principles stakeholders may consider when looking to engage millennials.
They include helping millennials find their own unique motivation for investing; providing personalized, achievable steps that make it easier to get started; demonstrating a clearer vision of how current decisions impact future consequences; offering relevant social comparisons that show what others are doing; creating opportunities for low risk experimentation that builds confidence; and, putting millennials’ unique individual needs first to inspire trust.
The study recognizes that investing is not always right for everyone and is intended to encourage conversation about how a more human-centred approach might be used to improve the financial well-being of Ontario millennials.
Prepared by Upside Consulting Group in collaboration with OSC staff, the study draws from nearly 30 hours of in-depth interviews with Ontario millennials (aged 18-36), as well as a review of behavioural sciences literature and existing investing channels available to millennials. The study is part of the OSC’s ongoing efforts to integrate behavioural insights into its work.
The study follows Missing Out: Millennials and the Markets, a November 2017 research study by the OSC, which found that only one in two Ontario millennials have investments, with many non-investor millennials citing lack of knowledge of investing and fear of losing money in the markets as reasons for not investing.
The OSC conducts research that provides insights into retail investor knowledge, attitudes and behaviours, and uses this information to inform policy and program development.
Findings are available here.