The conventional wisdom that those in their late 20s and early 30s act very differently and conservately with respect to investment decisions than older generations may be wrong, according to new data released by risk tolerance specialist company, FinaMetrica.
The company says it has used data culled from its risk profiling system between January, 2012 and July 2014 and has found that the so-called "millenials" are in fact very similar to people of older generations when it comes to risk tolerance.
It found that millennials do not have a material difference in risk tolerance compared to Generation X individuals, who were born between the early 1960s and early 1980s and that there was a 50 per cent chance of a 30-year-old being less risk tolerant than the average 45-year-old.
The FinaMetrica findings confirmed, however, that there was a more significant difference between millennials and baby boomers, with the company data revealing that 69 per cent of millenials are more risk tolerant than the average 60 year old.
FinaMetric co-founder and director, Geoff Davey said the research suggested millennials were no less risk tolerant than their Generation X or baby boomer counterparts.
"If it is true that millennials are more financially conservative, risk tolerance is not the reason," he said.
Davey said the company believed that millennials' capacity for and perception of risk might be better indicators of their conservative behaviour.
"Millennials who reached adulthood in 2000 have witnessed two major bear markets. Since then, job insecurity and rising unemployment, the commodity downturn and fears about global and Australian economic growth have forced many millennials to delay certain milestones that have traditionally categorised adulthood, including home ownership and starting a family," he said.
He said these problems could be compounded if millennials were not receiving proper investment advice.
