Five Questions With: Kelly Lannan

"We are a generation of savers because we actually saw some pretty scary things during the recession." / COURTESY FIDELITY INVESTMENTS
"We are a generation of savers because we actually saw some pretty scary things during the recession." / COURTESY FIDELITY INVESTMENTS

Kelly Lannan is the director of women and young investors at Fidelity Investments.
The financial services company recently concluded its second biennial Millennial Money Study, which examined how adults aged 25–35 are thinking about money.
Lennan spoke with Providence Business News about the study, its results and why millennials think about money differently than their Generation X and baby boomer counterparts.

PBN: Why does Fidelity conduct the Millennial Money Study?
LANNAN:
The goal of this survey and the inaugural survey was to look at the beliefs, behavior and impact of millennials, and how they will save, invest and spend. We also looked at their financial relationship with parents and how that influences them.

PBN: What surprised you most about this year’s results?
LANNAN:
What surprised me most was how much millennials are saving for retirement. [While] graduating eight years ago, I didn’t even think about a 401(k), so this is the most surprising thing – in the best possible way. Six out of 10 millennials are saving, which is up from our 2014 survey, when it was 51 percent. Eighty-five percent of millennials are saving in general and more are setting aside money for emergency funds in case something unexpected happens. On average, millennials are saving about $9,000 in their emergency funds, which is more than the Gen X and baby boomers are saving. This is a great thing to see.

PBN: Why do you think that is?
LANNAN:
We are a generation of savers because we actually saw some pretty scary things during the recession. I saw my parents lose a lot of money. Every time I put on the TV things were going down, and that has really helped us save for our future and put a priority on it. Something else that was really interesting is that more millennials are choosing to live at home. Millennials are often getting a financial leg up from their parents, and their parents are helping them still pay for more things. I can personally attest to my parents still paying for my cell phone bill, and there are other millennials just like me – about half – who have some sort of financial tie to their parents.

PBN: Can you talk about the disconnection in communication between millennials and their parents when it comes to the topic of money?
LANNAN:
It’s interesting: About 65 percent actually point to their parents as their financial role model, which should make your parent readers feel proud. But 35 percent are hesitant to start these types of conversations. The topic of finance is a taboo. People are more likely to talk about health-related issues than finances. People assume they know things about their finances and when neither party brings it up, it makes it a harder conversation to get started. We’re looking to encourage millennials to have these conversations. The first step is the hardest step. Listen, your parents were in the same exact shoes as you at one point, and they have things that they can teach you. Bring it up to them, bring it up in a simple conversation, and if they’re like my parents the floodgates will open up.

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PBN: Millennials – based on your results – appear hesitant to invest their money into anything with much risk involved. Why do you think that is, and do you expect that to change as they get older? Why or why not?
LANNAN:
With investing, many don’t know how to take the first step, and it’s usually the first that’s the hardest. When it comes to the stock market, if the education isn’t there, it prevents people from taking that first step. Also, even if millennials do have [investments], only 9 percent of them consider [themselves] investors. They are investors, they just don’t know it. So right there we see a big gap in education. Education should come first and that’s what we try to lead with. My group at Fidelity has created the website called MyMoney. On the website, we lead with education through short articles that can be digested in a couple minutes, and we have videos that millennials like to watch. No one is a one size fits all, so we’ve tried to develop these tools and widgets to help millennials do what’s best for them. If the education is there, I do believe millennials will be more likely to invest and save for the future.

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