[November 30, 2018]

Romance or Finance: What Matters Most?

Matters of the heart are quickly becoming worries of the wallet, as 56 percent of Americans say they want a partner who provides financial security more than "head over heels" love (44 percent). This sentiment is held by both men and women (54 percent, compared to 57 percent), whereas Generation Z (born between 1996 and 2010) is the only generation to choose love (54 percent) over money (47 percent).

These findings come from the latest Merrill Edge Report, which reveals Americans' increasingly complex relationship with their money, significant others and financial futures. Merrill Edge releases this national, biannual study of more than 1,000 mass affluent Americans¹ to take an in-depth look at their ever-evolving financial concerns and priorities.

"Americans are saving money at record rates, and yet we're seeing people of all ages look to their current and prospective partners to secure their financial futures. Economic uncertainty and a lack of financial planning seem to be creating this burgeoning trend of dependence on others for financial security," said Aron Levine, head of Consumer Banking and Merrill Edge. "We believe that it's crucial to have a financial plan at every life stage in order to achieve financial goals and stay on the right path to financial success."

Merrill Edge helps investors plan for the future at every stage of life with tools and resources designed to help clients build solid savings habits, budget effectively, prepare for emergencies, and invest for their life's goals, whether saving to buy a house, paying off student loans, preparing for retirement, or simply trying to make ends meet. Clients can be self-directed; work with a Financial Solutions Advisor™; or access Merrill Guided Investing, an online advisory program that offers portfolio management strategies developed by the company's Chief Investment Office.² Since Merrill Edge launched in 2010, it has grown to $203.9 billion in assets and more than 2.5 million accounts.

Merrill Edge Report respondents also said they prefer a partner who is career-focused (63 percent) over socially conscious (37 percent); frugal (55 percent) more than philanthropic (45 percent); and a saver (83 percent) rather than a spender (17 percent).

When money doesn't talk
While Americans are looking to their partners for financial security, they are tight-lipped when it comes to discussing their own finances. Respondents rank nearly all major relationship milestones ahead of discussing their finances, including meeting the family, being intimate, traveling together and discussing politics.

They even postpone the "money talk" with their significant others, with the majority admitting they rarely talk about their:

• Debt (60 percent).
• Salary (57 percent).
• Investments (55 percent).
• Spending habits (51 percent).

Saving to save
Perhaps their never-ending quest for financial security is prompting Americans to save at record rates. Respondents report they are willing to stash away an average of $18,000 annually on saving and investing, more so than spending on rent and mortgage payments ($16,000), their children's education ($12,000) or travel ($8,000).

Additionally, 24 percent of Americans say nothing is constraining their ability to save for the future, while 73 percent think they can have everything they want in life, as long as they save and budget accordingly.

But it is clear that saving does not equate to planning. The majority say they have no monetary goal in mind for many of life's major milestones. For example, 67 percent are unsure how much money they should save before having a baby. Many also admit they have no "magic number" for the following:

• Getting married (64 percent).
• Sending children to college (54 percent).
• Putting a down payment on a house (51 percent).

Even for retirement, half have no goal in mind. And of those who do have a "magic number," 79 percent are aiming low, reporting they are saving for less than $1 million. Americans even think that their planned retirement age will change an average of 15 times throughout their lives.

This lack of planning extends well after they are gone. Ninety-three percent agree that it is important to create a will, yet only 42 percent currently have one.

Next-gen finances
New and emerging technologies may be the solution to planning shortfalls. According to the report, nearly half of all Americans admit that social media impacts their finances, specifically their spending habits (48 percent), budget (43 percent), savings (42 percent), and bank account (40 percent).

Respondents are also increasingly embracing artificial intelligence (AI) in their financial lives, with 49 percent already comfortable with AI providing financial guidance, managing day-to-day finances (49 percent), and making investments (47 percent). They even say they would be comfortable using AI to protect their home (67 percent), do their job (41 percent) and drive their car (41 percent).

Many predict in the next five years, the investment guidance they receive will be primarily via digital channels (74 percent); mobile trades will be the norm (69 percent); and less than 20 percent of trades will occur on the Stock Exchange floor (63 percent).

"Perhaps this rapid adoption and reliance on technology will inspire Americans to take action and plan for their financial futures," said Levine. "At Merrill Edge, we're taking a high-tech and high-touch approach to marry the best of the digital and physical worlds, providing our clients financial advice and planning on their terms."

For more in-depth information about the financial behaviors and priorities of mass affluent Americans, read the entire Fall 2018 Merrill Edge Report. A complementing infographic is available here.

¹ Merrill Edge Survey Methodology
Convergys (News - Alert) (an independent market research company) conducted a nationally representative, panel-sample online survey on behalf of Merrill Edge Sept. 27-Oct. 13, 2018. The survey consisted of 1,034 mass affluent respondents throughout the U.S. Respondents in the study were defined as aged 18 to 40 (Gen Z/Millennials) with investable assets between $50,000 and $250,000 or those aged 18 to 40 who have investable assets between $20,000 and $50,000 with an annual income of at least $50,000; or aged 41-plus with investable assets between $50,000 and $250,000. For this purpose, investable assets consist of the value of all cash, savings, mutual funds, CDs, IRAs, stocks, bonds and all other types of investments such as a 401(k), 403(B), and Roth IRA, but excluding primary home and other real estate investments. We conducted an oversampling of 300 mass affluents in Atlanta. The margin of error is +/- 3.1 percent for the national sample and about +/- 5.6 percent for the oversample market, reported at a 95 percent confidence level.

² The Chief Investment Office (CIO) develops the investment strategies for Merrill Guided Investing (MGI), including providing its recommendations of ETFs and related asset allocations. Managed Account Advisors LLC, Merrill Lynch's affiliate, is the overlay portfolio manager responsible for implementing the MGI strategies for client accounts, including facilitating the purchase and sale of ETFs in client accounts and updating account asset allocations when the CIO's recommendations change, while also implementing any applicable individual client or firm restriction(s).

Merrill Edge
Merrill Edge is a streamlined investment service that provides access to the investment insights of Merrill Lynch and the convenience of Bank of America banking. With Merrill Edge, clients can view their Merrill Edge investment and Bank of America bank accounts on one page online. They also have access to easy-to-use tools, actionable insights, step-by-step guidance and competitive pricing for online trades.

Bank of America
Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 67 million consumer and small business clients with approximately 4,400 retail financial centers, approximately 16,100 ATMs, and award-winning digital banking with more than 36 million active users, including nearly 26 million mobile users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

For more Bank of America news, including dividend announcements and other important information, visit the Bank of America newsroom. Click here to register for news email alerts.

www.bankofamerica.com

Neither Merrill Lynch nor any of its affiliates or financial advisors provides legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

Banking products are provided by Bank of America, N.A., and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation.

Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.

Merrill Edge® is available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), and consists of the Merrill Edge Advisory Center (investment guidance) and self-directed online investing.

MLPF&S is a registered broker-dealer, Member SIPC and wholly owned subsidiary of Bank of America Corporation.

© 2018 Bank of America Corporation. All rights reserved.

View source version on businesswire.com: https://www.businesswire.com/news/home/20181130005030/en/

[ Back To TMCnet.com's Homepage ]