MILLENNIALS: THE NEXT BEST THING

MILLENNIALS: THE NEXT BIG THING (AGES 18-34) Millennials are a do it yourself generation and are more likely to use online trading and internet banking. They are frequently on the web (via social media) and value the use of technology to obtain, verify and track information. There are currently 77 million Millennials in the U.S. (24% of population) – equal to Baby Boomers9 Millennials will be roughly 50% of the U.S. workforce in 2020 and 75% of the global workforce by 203010 Millennials are the most ethnically and racially diverse generation to date11 They are highly educated compared to previous generations – at least 34% have a Bachelor’s degree11 They witnessed the Great Recession, are concerned about investing and are less trusting of financial institutions12 Millennials are increasingly adopting a global mindset with factors such as social responsibility and the environment frequently playing a key role in how they invest12

MILLENNIALS: THE NEXT BIG THING Millennials typically want to remain in control of their investments and describe themselves as “self-directed” and “conservative.” However, given their general financial status and lack of long-term planning, they could benefit from input and guidance on their finances. Millennials confront a higher unemployment rate than previous generations at every education level13 More than half of Millennials state debt is “their biggest financial concern,”14 yet only half have ever ordered a credit report15 Nearly 70% surveyed have not begun saving for retirement16 Millennials are delaying marriage, buying a home, having children and investing aggressively (e.g., not planning for the longer-term)17 Referred to as an “Economically Lost” generation18 Accenture estimates that $30 trillion in assets will pass from Baby Boomers to Millennials over the next 30 years19

Active Strategies: Still in Demand Younger and wealthier investors remain committed to active management. 60% of U.S. investors want to include some actively managed funds in 2017 Among Millennials (18-35): 73% Among millionaires: 74% 67% believe that active management is especially important in a higher risk environment Among Millennials: 76% Among millionaires: 79% Source: Legg Mason 2017 Global Investment Survey, US Investors, Key Findings

Millennials: Living Young, But Thinking Old More then 3 out of 4 Americans describe their risk tolerance as very/somewhat conservative (78%) Yet Millennials — despite having more time to ride out ups and downs in the markets — are much more cautious 85% say their tolerance is very/somewhat conservative 52% say their tolerance is very conservative Baby Boomers (age 53-71), in contrast, are relatively bold 74% say their tolerance is very/somewhat conservative Only 29% say their tolerance is very conservative Source: Legg Mason 2017 Global Investment Survey, US Investors, Key Findings

Millennials: Risk Aversion Changing? While only about half of investors surveyed plan to take on more risk, younger investors were much more likely to do so. 47% of respondents intend to take on more risk in their portfolio over the next 12 months Among Millennials: 78% Among HNW Millennials: 86% Just under half of these respondents (22% overall) expect to take on much more risk over next 12 months Among Millennials: 45% Among HNW Millennials: 45% Source: Legg Mason 2017 Global Investment Survey, US Investors, Key Findings

END NOTES 9. “Millennials: Breaking the Myths,” The Nielson Company. February 18, 2014. 10. “Three Reasons You Need to Adopt a Millennial Mindset Regardless of Your Age.” By, Jeanne Meister. Forbes (www.forbes.com). October 5, 2012. 11. “Millennials: Confident. Connected. Open to Change.” Executive Summary. Pew Research Center. February 24, 2010. 12. “Money Habits of Millennials.” By, Mark P. Curben, CFP®, CMFC, AFC. February 19, 2014. Investopedia (www.investopedia.com/articles/personal- finance.) 13. “Indisputable Evidence that Millennials Have it Worse Than Any Other Generation in 50 Year.” By, Jordan Weissmann. The Atlantic. February 11, 2014. 14. More than Half of Millennials Say Debt is Their “Biggest Financial Concern.” Wells Fargo News Release. Wells Fargo Study. May 22, 2013. 15. “Millennials Have No Idea How Credit Scores Work.” By, Martha C. White. Time. May 13, 2014. Study cited was conducted by Consumer Federation of America and VantageScore Solution. 16. “One Thing That Worries Millennials, But We're Afraid to Talk About.” By, Lacy Crawford Jr., Mic Network Inc. September 6, 2013. 17. “Think You Know the Next Gen Investor? Think Again.” UBS Investor Watch. UBS AG. 1Q 2014. 18. “The Millennials: An Economically Lost Generation.” By, Chad Stafko. American Thinker. October 27, 2013. 19. “Boomers Never Got Their $30 Trillion Inheritance — Will Millennials?” By, Dan Kadlec. Time. February 13, 201

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