How Millennials Can Use Bank Services To Enhance Their Investment Portfolio

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Being financially secure is an important life goal for most people. However, reportedly only around half of millennials think they fall into this category.

To achieve the elusive state of financial security, many people turn to investing. This is especially true for millennials, who are more likely to invest in stocks, bonds, mutual funds and exchange-traded funds (ETFs) than other generations. So if you’re a millennial who’s looking to improve their portfolio and achieve financial independence, consider how banking services can play a role in managing these investments.

4 Ways Millennials Can Use Bank Services To Enhance Their Portfolios

Millennials are well into their working years, so they’ve already established many of their financial habits and beliefs. However, there’s always room for improvement, and many millennials have overlooked the banking resources at their fingertips that they can use to build a better investment portfolio.

Below are four ways that millennials can take advantage of these services and optimize their approach to investing. Many of the key findings come from a YouGov survey of more than 400,000 Americans about their financial attitudes and behaviors.

1. Use Personalized Banking Services To Lower Your Risk

Millennials are more open to taking risks with their money than older generations. In fact, 46% of millennials “don’t mind taking risks” with their money, compared to just 28% of Gen X and 16% of baby boomers.

While risky investments can sometimes pay off, a balanced portfolio is the best way to ensure that you don’t lose all of your savings due to an unpredictable market. Personalized banking can help lower this risk with services such as:

• Robo-advisors for automated advice based on risk tolerance
• Investment tools tailored to personal goals
• Financial education resources for managing debt and building savings
• Better digital experiences for tracking and managing investments

2. Listen to Professionals

Millennials are more willing to take professional advice than other generations: 41% said they’ve consulted professionals before making financial decisions — roughly double the number of Gen Xers and baby boomers who rely on financial advice. In addition, around 25% of millennials are currently working with a financial advisor on investment products and services.

However, this still represents the minority of the generation. More millennials should be aware of the role that banking services can play in guiding better investment strategies. Financial advisors can create personalized investment plans that make sense for your financial situation and risk tolerance.

3. Gain Exposure to Different Investment Options

Millennials view real estate as the investment that has the greatest opportunity for growth. But they also tend to invest heavily in common financial products like stocks, corporate bonds, mutual funds and ETFs. On average, millennials are more likely to invest in these financial products than any other generation.

Millennials can use banking services to gain more exposure to a diverse range of investment opportunities. For instance, many banks are opening up their offerings to include:

• Fractional investing so that you can invest in assets like real estate or high-value stocks without buying full ownership.
• Alternative assets like digital assets and private equity that may not have been accessible to mainstream investors in the past.

4. Align Your Portfolio With Your Values

One recent study found that 63% of millennials believe “they have a responsibility to help fix societal issues through their investments.” This belief translates into greater interest in environmental, social and governance investment funds, as 73% of millennials claim to be more likely to invest in “a fund with a better carbon footprint.”

Banking services that are aware of millennial investing trends have begun to align themselves with these perspectives. Many banks now offer:

• Socially responsible investing options that allow you to invest in companies that share your ethical principles.
• Impactful investing opportunities, which aim to generate financial growth as well as societal benefits, such as expanding renewable energy or affordable housing projects.
• Greater transparency in reporting to help customers analyze how their investments are producing real-world outcomes beyond financial profits.

Final Thoughts

Millennials tend to be optimistic about their finances: 47% believe their financial situation will change for the better over the next year, compared to just 14% who think it will get worse.

By utilizing the full extent of the banking services that are available, millennials can turn this positive thinking into a measurable impact on their investment portfolios.

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