Financial Education & The Generations

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2 Financial Education & The Generations Survey Methodology These results are based on a survey conducted by Maritz, Inc. on behalf of TD Ameritrade Holding Corporation. Nine hundred sixty-three (963) adults between 21 and 80 years of age and broken down into generational segments participated in a telephone survey from November 16 through December 7, The generational definitions are defined as the following: Mature: born Boomer: born : born : born Where Do the Generations Go for Financial News and Information? Younger and older generations alike still turn to traditional media (i.e., newspaper, TV and radio) the most to stay informed about news shaping the economy and financial markets as 61 percent of those surveyed turn to TV and radio talk shows and 51 percent rely on daily newspapers. Of those, turn to daily newspapers the most at 59 percent, compared to just 47 percent of and 42 percent of who rely on daily newspapers. (64%) and (52%) rely more on news Web sites, while the older generations ( 28% and 43%) rely less on news Web sites and more on print. 100% Financial news and information sources turn to TV and radio first at 64 percent, followed by daily newspapers at 57 percent. is a more collaborative group with 60 percent turning to friends, relatives and colleagues for financial information, compared to 31 percent of, 43 percent of and 46 percent of who reported the same. One-third of surveyed rely on social media for news about the economy and financial markets ( 14%, 21%, 27%). turn to professional investment advisors the least for news about the economy and financial markets at 21 percent, compared to 37 percent of, 38 percent of, and 32 percent of. What Sources Do They Trust Most for Financial News and Information? 80% 60% 40% Mature (23%) and Boomer (24%) generations reported that they trust TV or radio talk shows the most for news and events shaping the economy and financial markets. Twenty-one percent (21%) of and 22 percent of reported that they trust their professional investment advisors as well. 0% news Web sites print 1

3 respondents didn t trust any one source the most, but trust a variety of sources from traditional media, investment advisors and news-oriented Web sites equally at 17 percent each. trust their friends, colleagues and relatives as well as TV and radio talk shows the most (21 percent for each), followed closely by news-related Web sites at 20 percent. is most skeptical of professional investment advisors with only 10 percent of respondents trusting them the most as a valued source of news. money management in their teen years has increased with the younger generations: Sixty-two percent (62%) of and 69 percent of took responsibility for their finances in their teens, compared to 41 percent of and 53 percent of. Forty-three percent (43%) of and 39 percent of didn t take responsibility for their finances until they were in their 20s, compared to 33 percent of and 30 percent of who reported the same. Learning & Managing Financial Matters Nearly 80 percent of respondents feel that they were taught money management at an appropriate age. 58% of all respondents took responsibility of their finances in their teen years 100% 80% Most respondents (81%) were first exposed to the concepts of saving, spending and managing their personal 60% finances before the age of % Increasingly, more people are being taught about financial education at earlier ages, as 40 percent of those surveyed reported they were taught about money and personal finance at age 12 or younger ( 32%, 35%, 0% teen years 20s 45% and 47%). Eighty-five percent (85%) of respondents relied on parents, 40% of all respondents were taught about money and personal finance at age 12 or younger. grandparents or other relatives for financial management advice and guidance. Seventy-six percent (76%) of those respondents said 45% 47% that their parents were the most influential in providing guidance and tips for managing their personal finances. 32% 35% Of those who said parents were the most influential, the Mature generation feel this the least at 64 percent. This group s second-most influential person was their spouse at 10 percent. Eighty-four percent (84%) of respondents gave their financial mentors an A or B (excellent or good) rating. Fifty-eight percent (58%) of respondents took responsibility for managing their finances in their teen years. The total percentage of respondents who learned While most were happy with their financial mentors, 74 percent of respondents feel that schools should take on more responsibility for teaching children how to save and manage their money. 2

4 Forty-four percent (44%) of the Mature generation feel that employers should be responsible for teaching employees about money management, compared to just 22 percent of and who feel the same. While managing money remains one of the biggest challenges for all generations (54%), it appears to be getting progressively less challenging as the younger generations take control of their financial matters., more than any other group (50%), feel they have more financial stress than their parents. Thirty-seven percent (37%) of answered the same, followed by 44 percent of and only 30 percent of. Respondents who feel they have more financial stress than their parents 37% 50% 44% 30% More than half (54%) of those respondents feel they have just average knowledge about the stock market. Generations & Financial Goals Financial priorities differ across the generations. For example: Thirty-nine percent (39%) of and 29 percent of stated that their top priority at their stage in life was to be able to manage their income and expenses so that they could live within their means., however, was slightly more optimistic about managing their money, as 47 percent of were completely confident they would accomplish this goal, compared to 44 percent of who reported the same. Thirty-four percent (34%) of stated that their top priority was generating enough income from their investments to live comfortably during retirement. Their outlook, however, was less optimistic, as only 26 percent reported they were completely confident they would accomplish this goal before retirement. Twenty-five percent (25%) of stated that their top priority was reducing personal debt. Thirty-four percent (34%) of felt completely confident they would achieve their goal. Seventy-one percent (71%) of respondents agreed that the last two years have compelled them to learn more about Financial Priorities and Optimism managing money. feel that they were most set up for financial success in terms of financial education (61%). managing income/expenses to live within means completely confident they will accomplish goal 39% 44% Fifty-five percent (55%) of all respondents own stocks, bonds, mutual funds or exchange-traded funds. generating enough income to live comfortably completely conf ident they will accomplish goal 26% 34% Of those respondents, most (81%) learned basic financial concepts in their teens or younger. When it came to learning about investing in the stock market, 57 percent learned about investing in their 20s or 30s. (21%), (24%) and (28%) were heavily influenced by their parents when it came to learning about investing, while the Mature generation found influence from financial professionals (22%) or were self-taught (22%). reducing personal debt completely confident they will accomplish goal managing income/expenses to live within means 25% 28% completely confident they will accomplish goal Priorities Conf idence level 34% 47% 3

5 While, and agreed their biggest regret was not saving enough for the future, regrets this the most (62%). Fifty percent (50%) of most regret not doing all they could do to educate themselves on personal finance and investing. Achieving Financial Success Roughly one-third (32%) of all respondents defined financial success as being debt free, while 26 percent defined financial success as putting money aside every month for long-term goals such as education or retirement. While the older generations feel being debt-free defined their financial success (Mature 34%, Boomer 33%, 31%), 36 percent of feel financial success was defined by being able to put money aside every month for long-term goals such as education or retirement. 31% 33% 34% being debt free Defining financial success 36% putting money aside every month for long-term goals Fifty-nine percent (59%) of feel they have achieved financial success and 19 percent reported they were on their way to reaching financial success. Eight percent (8%) were working on becoming financially successful, but feel they may not succeed, and 11 percent feel they are far behind where they wanted to be and that they would unlikely achieve financial success. Forty-eight percent (48%) of said they were on their way to reaching financial success and 18 percent have already achieved financial success. Twenty percent () were working on becoming financially successful but might not succeed and 12 percent feel they are far behind where they wanted to be and are unlikely to achieve financial success. Achieving Financial Success 59% 18% 48% 19% 8% 10% 12% 8% 56% 13% 11% have achieved financial success on their way to reaching financial success working on becoming financially successful, but may not succeed far behind where they want to be and are unlikely to achieve financial success More than half (56%) of feel they are on their way to reaching financial success, but 20 percent feel that while they are working at becoming financially successful, they might not succeed, and another 13 percent feel they are far behind where they wanted to be and are unlikely to achieve financial success. was more optimistic with nearly 64 percent feeling that they are on their way to reaching financial success. Only 15 percent feel that while they are working at becoming financially successful, they might not succeed, and another 11 percent feel they are far behind where they wanted to be and are unlikely to achieve financial success. Of the nearly 70 percent of respondents who have achieved financial success or are on their way to achieving it: Living within their means (30%) and having a financial plan and sticking to it (29%) were the main reasons for self-proclaimed financial success. Of the nearly 30 percent of respondents who are struggling to achieve financial success: Twenty-one percent (21%) of reported that health issues and/or medical expenses contributed to their struggles, while 23 percent of, 18 percent of Gen X and 20 percent of reported their biggest struggle is that their expenses are rising faster than their income. 9% 64% 15% 4

6 Fifty-one percent (51%) said that other factors contributed to their struggles. Of those respondents, common themes included struggling with the economy, unemployment, limited education and rising medical expenses. Financial Confidence Eighty five percent (85%) of all respondents reported that it requires more self-discipline and knowledge to manage personal finances today than it used to. Despite that finding, 93 percent were confident in managing personal finances. Additional findings on financial confidence include: Nearly 60 percent of respondents would feel more comfortable managing their finances if they knew more about investing and money management. Of the 55 percent of respondents who considered themselves investors: were divided on deciding which was more difficult to manage their personal budget (47%) or their investment portfolio (47%). Forty-four (44%) of considered managing their investment portfolios to be more challenging. Fifty-six percent (56%) of and 53 percent of feel that managing their personal budget was more difficult, while 37 percent of and 43 percent of feel managing their investment portfolio was more difficult. Survey Methodology These results are based on a survey conducted by Maritz, Inc. on behalf of TD Ameritrade Holding Corporation. Nine hundred sixty-three (963) adults between 21 and 80 years of age participated in a telephone survey from November 16 through December 7, The margin of error in this survey is ±3.2%. This means that in 19 cases out of 20, survey results based on 963 respondents will differ by no more than 3.2 percentage points in either direction from what would have been obtained by seeking the opinions of all adults living in the United States ages 21 through 80. Maritz, Inc. and TD Ameritrade Holding Corporation are separate, unaffiliated companies and are not responsible for each other s products and services. About Maritz St. Louis-based Maritz is a sales and marketing services company, which helps companies achieve their full potential through understanding, enabling, and motivating employees, channel partners and customers. Maritz provides market and customer research, communications, learning solutions, incentive initiatives, rewards and recognition, effective meeting, event and incentive travel management services, and customer loyalty programs. For more information, visit or MARITZ. About TD Ameritrade Holding Corporation TD Ameritrade Holding Corporation (NASDAQ: AMTD), through its brokerage 1 and education subsidiaries, combines innovative trading technology, easy-to-use and understand trading tools, investment services, investor education and superior client service to create a market-leading financial services experience. Home to Kiplinger s #1 online broker 2, the award-winning thinkorswim trading technology 3, and the respected Investools investor education program, TD Ameritrade provides millions of retail investors, traders and independent registered investment advisors with the tools, service and support they need to help build confidence in today s rapidly changing market environment. For more information and resources for journalists, please visit the TD Ameritrade newsroom at 1. TD Ameritrade, Inc., member FINRA ( ( ( and TD Ameritrade Clearing, Inc., member FINRA/SIPC 2. TD Ameritrade was ranked #1 and received an overall score of 5 stars (tied for first place with one other broker) in the Kiplinger s Online Broker Ratings, Kiplinger s Personal Finance, 02/2011. Fourteen brokers were rated in the categories: Costs, Web site usability, Investment choices, Customer service, and Research and tools. 3. thinkorswim, prior to joining TD Ameritrade, earned 4.9 stars, the top score, in the category Trading Technology, and was rated #1 overall online broker in Barron s ranking of online brokers, 3/15/2010. thinkorswim was evaluated versus others in eight total categories, including trade experience, trading technology, usability, range of offerings, research amenities, portfolio analysis and reporting, customer service and education and costs. thinkorswim topped the list in 2006, 2007, 2009 and 2010 with the highest weighted-average score. Barron s is a registered trademark of Dow Jones & Company