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UBS Q2 Investor Watch reveals Boomers and Millennials are redefining family and finance


UBS Wealth Management Americas (WMA) has released its quarterly UBS Investor Watch report, "The ties that bind," which focuses on how wealthy Baby Boomers and their Millennial children are redefining the traditional parent/child relationship. 

The findings reveal the stark contrast between Millennials' view of their parents as peers and friends, and Boomers' more authoritative view of their parents. The strong ties between Millennials and Boomers last far into adulthood and often include financial support – nearly three quarters (74 per cent) of Millennials receive some form of financial assistance from their parents.

"Boomers and Millennials are as much friends as they are parents and children," says Paula Polito, Client Strategy Officer of UBS Wealth Management Americas. "Their unique relationship deepens their bond, and they maintain both close emotional and financial ties."

The majority of Millennials view their parents as peers, mentors and friends, whereas more Boomers saw their parents as authorities. Nearly three quarters (73 per cent) of Millennials say they connected with their parents more than once a week during college, compared to 34 per cent of Boomers.

In terms of planning their own families, Millennials are putting off marriage and children later than Boomers did, opting for adventure and life experience: 28 per cent say they have traveled the world for six months or more, compared to 12 per cent of Baby Boomers.

Baby Boomer parents are overwhelmingly positive about their ability to help their children financially. A majority (80 per cent) said they feel good about providing financial support, while only 10 per cent say they withhold it to teach adult children financial responsibility. However, 52 per cent of Millennials feel shame, frustration or guilt about accepting assistance from their parents.

The financial support Millennials receive from their parents takes many forms. Most is for necessities: health insurance (29 per cent), home buying/renting (28 per cent), auto insurance (26 per cent) and utilities (23 per cent), though Millennials receive funding for vacations (19 per cent) and spending money (21 per cent) as well.

Millennials are almost twice as likely to move home after college as their parents were. The primary motivation for doing so is to save money; however, 24 per cent of Millennials prefer to live with their parents, while 22 per cent say their parents wanted them to stay.

Investor Watch found that when it comes to finances, a majority of Millennials (73 per cent) tend to focus on short-term needs and goals, such as homes and travel, believing retirement is too far away to worry about. Over half of Millennials with retirement accounts have or would consider dipping into them to make a large purchase, with 25 per cent having already withdrawn funds.

Millennials have a completely different view of the markets than Boomers and are highly risk averse. On average, Millennials hold twice as much cash as Boomers (47 per cent of assets vs 20 per cent for Boomers). However, they do not appear to feel safer or more content with their finances: only 29 per cent are happy with their portfolios, compared to 78 per cent of Baby Boomers.

"The ties that bind Boomers and Millennials are deep and long lasting," says Sameer Aurora, Head of Client Strategy for UBS Wealth Management Americas. "The relationship has major financial implications for both generations, but few Millennials are adopting their parents' investment behaviours."

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