FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
Millennials lean on their parents for financial help (InvestmentNews)
A new survey from UBS Group AG found that 74% of affluent millennials rely on their parents for financial support. The group surveyed 1,131 millennials aged 21-29 who have at least $100,000 in household income or the same amount of assets to invest, or aged 30-36 with at least $250,000.
29% of those surveyed said their received help with health insurance; 28% with home purchases, 26% with auto insurance, and 23% with utilities, reports Christine Idzelis.
“They came into adulthood during a very uncertain economic time,” said Sameer Aurora, the head of client strategy for UBS Wealth Management Americas. “The financial crisis has cast a long shadow.”
The Fed’s lone dissenter was right… (Advisor Perspectives)
After Wednesday’s snooze Fed meeting, analysts are gearing up for a Fed hike in June. Brian Wesbury and Robert Stein of First Trust Advisors noted three reasons why the Fed is likely to hike then: 1) the Fed touted the labour market, 2) the Fed noted “solid” growth in household income and “high” consumer sentiment, 3) the Fed removed the language about global risks.
“In our view, [the lone dissenter Esther] George was right and everyone else wrong. Economic fundamentals warrant a rate hike. The economy can handle higher short-term rates. The unemployment rate is already very close to the Fed’s long-term projection of 4.8% and nominal GDP growth — real GDP growth plus inflation — is up at a 3.5% annual rate in the past two years,” wrote Wesbury and Stein.
Obama liked the “The Big Short” — except for the ending (The New York Times)
US President Barack Obama told the New York Times’ Andrew Ross Sorkin that although he liked “The Big Short,” the movie based on Michael Lewis’ 2010 book on the financial crisis, he wasn’t too keen on the ending because it suggested that nothing has changed on Wall Street.
The financial sector “is bigger, absorbs more resources and maybe most importantly, more talent than I would like to see … But there is no doubt that the financial system is substantially more stable,” Obama told Sorkin.
“It is true that we have not dismantled the financial system, and in that sense, Bernie Sanders’s critique is correct. … But one of the things that I’ve consistently tried to remind myself during the course of my presidency is that the economy is not an abstraction. It’s not something that you can just redesign and break up and put back together again without consequences.”
Baby Boomers are way less optimistic about the future than young people (Business Insider)
The difference in consumer confidence between Americans younger than 35 and those older than 55 is at a record high, according to data shared by Deutsche Bank’s Chief International Economist Torsten Sløk in a recent note to clients.
Sløk attributed this to the fact that millennials have less debt than the older generation, and their unemployment situation compared to that of older people is better than it has been in years. However, it’s also interesting to note that Baby Boomers are much closer to retirement than millennials, another possible factor in the Boomers’ relative pessimism.
Financial stress is correlated with poor health (FA Magazine)
A study by Lockton Retirement Services, a workplace benefits provider based in Kansas City, Mo., writes that financial stress can lead to poor health and productivity issues.
“Those reporting high levels of stress were more than four times as likely to suffer from symptoms of fatigue, headache, depression or other ailments. They were also twice as likely to report poor health overall, leading to more sick days, increased absenteeism and decreased productivity,” reports Karen Demasters.