New MassMutual Study Finds Significant ‘Advice Gap’ Between Millennials, Other Generations

Millennials are most likely to react to market volatility and least likely to rely 
on professional financial advice for their retirement savings

SPRINGFIELD, Mass. – Millennials are much more likely to make risky investment decisions compared to other Americans by reacting to short-term market volatility yet they are less likely to rely on professional financial advice, according to new research from Massachusetts Mutual Life Insurance Co. (MassMutual).

“MassMutual’s research finds a real ‘advice gap’ exists between younger workers and other generations,” said Tom Foster, national spokesperson for MassMutual retirement plans. “We discovered that those who rely the least on professional financial advice are most likely to react to shorter-term market trends by making potentially harmful decisions to reallocate their retirement savings investments.”

Morningstar reports that bad decisions by investors trying to time the equity markets reduce returns on average by 2.5 percent a year.1 In addition, the longer investors remain in the market, the better their chances of making money, according to data from Standard & Poor’s.2

The Dow Jones Industrial average hit 21,000 on March 1, climbing nearly 3,000 points after the November election before sliding back the lower 20,000s and once again approaching 21,000.  The CBOE (Chicago Board Options Exchange) Volatility Index, sometimes referred to as the “Fear Index,” which measures expectations for market volatility in the next 30 days, dropped to its lowest level since February 2007 on May 1 after consistently rising in April.

A Divided America

So -- where do investors think equity markets are headed? The study reveals that Americans are divided on the likely future direction of the markets and potential opportunities. Overall, 31 percent don’t view the recent market activity as anything unusual, with another 28 percent saying they expect the market to correct after the recent surge, and 19 percent predicting a longer bull market, according to the MassMutual Retirement Savers Study. One in five (21 percent) of survey respondents said they either don’t pay attention to the markets or simply don’t know how they view the recent stock market activity.

There is good news: despite the recent ups and downs of the market, fully 60 percent of adult Americans say they are standing pat on their retirement savings strategy, with 63 percent of women and 56 percent of men saying the same, according to the study.  Yet only 23 percent of Millennials are maintaining their current strategy compared to 59 percent for those ages 34-49, 74 percent for ages 50-64 and 82 percent for ages 65 and older.

A third of Millennials (32 percent) said they were moving more of their retirement savings into stocks and equities to benefit from future growth, the study found. Meanwhile, a quarter of Millennials (25 percent) said they are moving more of their savings into fixed-income investments such as bonds or money market accounts due to recent stock market activity.

The ‘Advice Gap’

The study pinpointed profound differences in how -- or if -- Americans receive financial advice. Overall, 32 percent of Americans polled said they relied on a financial advisor to guide them in making decisions about investments. However, older respondents were much more likely to use an advisor, with 62 percent of those ages 65 or older relying on professional money advice as compared to 8 percent of Millennials. Women (36 percent) are also more likely to rely on an advisor than men (29 percent), the study found.

“Getting professional advice helps reduce uncertainty about money matters, especially in volatile markets,” Foster said. “Our study showed an inverse relationship between reliance on professional money management and uncertainty about investing.”

The study found that one in 10 Americans admitted to being uncertain about how to invest their retirement savings. Millennials were twice as likely to be uncertain while only 1 percent of those ages 65 or older said the same. The older the investor, the study found, the more certain he or she was about how to invest.

On a positive note, Millennials were almost twice as likely as compared to the general population to rely on their employer’s educational programs and resources to guide them when investing and allocating their retirement savings. They are also more likely to already be using investment strategies such as managed accounts that automatically allocate investments based on an investor’s age, risk tolerance or other factors.

“MassMutual has been seeing greater adoption of automatic allocation investment strategies such as target date funds and managed accounts as more employers move towards automatically enrolling employees into 401(k)s and other defined contribution plans,” Foster said. “The proliferation of these investment strategies could be the saving grace for many people as target date funds and managed accounts take away much of the guess work and uncertainty about investing for many people.”

PSB conducted the MassMutual Retirement Savers Study on behalf of MassMutual as part of an omnibus survey among 1,002 respondents fielded April 3-10, 2017. The results shown here reflect the 450 Americans who currently have a 401(k) plan and/or other retirement investments.


Finding Retirement Resources

Retirement savers have many options on obtaining education assistance and resources about how to most effectively invest for retirement:

  • Financial Advisors – Local financial advisors typically take a holistic approach to offering advice and guidance about retirement savings. They can help consumers make the most of individual strategies such as IRAs and other investments as well as offer guidance about how to make the most of employer-sponsored retirement plans such as a 401(k), 403(b) or 457. You can research the background, experience and credentials of financial advisors in your area through BrokerCheck, a website sponsored by the Financial Industry Regulatory Authority (FINRA) at
  • Your employer – If your employer sponsors a 401(k) or other retirement plan, chances are your company also sponsors educational sessions about retirement savings and how to make the most of your retirement plan. The sessions may be run by a financial advisor, retirement education specialist or both. You may be able to arrange a one-on-one meeting with either the advisor or the specialist to help you better understand your options.
  • Retirement Plan Providers – The financial services or insurance company that provides your company’s retirement savings plan should have educational resources for you to learn more about retirement planning.
    • Online -- Many resources are located online, including calculators for you to determine how much savings you need to reach your retirement goal, how that savings translates into income, information about available investment options and how best to allocate your savings within them based on your age, risk tolerance and other factors.
    • Call Centers – You can obtain information about your retirement savings account, seek guidance and information about effective savings strategies, learn about other available resources and other questions by calling your retirement plan providers call center.

Social Security Administration – Working Americans covered by Social Security can receive annual reports about their contributions and projected income at different retirement ages. You can learn more at

About MassMutual

MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyowners. MassMutual offers a wide range of financial products and services, including life insurance, disability income insurance, long term care insurance, annuities, retirement plans and other employee benefits. For more information, visit

 MassMutual is a marketing name for Massachusetts Mutual Life Insurance Company.

1Bad Timing Costs Investors 2.5 percent a Year, June 11, 2014, Morningstar,

2Time in the Market is More Important than Market Timing, Chart, Based on S&P 500 daily total return data since 1928,