Millennials turning to automated investing in response to market volatility
Older generations still prefer to work with a financial adviser to mitigate risk.
Investors are reacting to market volatility differently across generations, according to a new survey of 1,000 U.S. investors by TD Ameritrade.
Millennials, many of whom are going through their first major market drops, are turning more toward automated investing to mitigate risk than are older cohorts. TD’s study found younger investors are four times more likely than boomers to consider automating investment decisions.
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More than a third of millennials said the ability to schedule regular investments would make them feel less nervous about volatility, and 43% said it would “give them peace of mind.” This could be because automating investing removes emotions, said Keith Denerstein, TD Ameritrade director of guidance product management.
To meet this demand, TD is adding a new cash management feature to its suite of digital advisers — Essential Portfolios, Selective Portfolios and Personalized Portfolios — that lets users automatically move assets into or out of cash.
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Baby boomer and Gen X investors are more inclined to consult a financial adviser, the study found.
“Each of these generations has been influenced by different economic events that have shaped their financial attitudes and preferences, so it’s important to offer choices that cater to their unique needs and provide the best experience,” Mr. Denerstein said in a statement.
Millennials also reported feeling more severely affected by recent market volatility than older generations, possibly because baby boomers and Gen X investors have been through more market cycles, Mr. Denerstein said.
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