Hey Boomer!

Answer: The answer is yes! Before delving into why and how, let’s outline definitions and differences between the two generations.

Baby Boomers were born between 1946 and 1964. Boomers were influenced during their formative years by post-WWII prosperity, the civil rights movement, and the space race. Technology for us meant television, and much later on, adaptation to computers, smartphones, and the digital world. Financial experiences were shaped by lower housing costs, higher interest rates, and a long period of economic growth.

In a survey by Betterment, only 10% of Boomers said they’d be willing to take on higher risk. As a group, they appreciate structure, established processes, and prefer lower-risk, stable investments. Boomers typically prefer phone calls or face-to-face conversations.

Millennials, born between 1981 and 1996, had quite a different experience. They came of age with the internet, smartphones, and social media making technology second nature and prefer texting or digital communication over conversations. Influential events included 9/11 and the 2008 financial crisis. In their careers, Millennials often look for flexibility, purpose, and opportunities to grow. Having entered adulthood during tough economic times and often carrying high student debt, they’re known to value experiences over possessions and a more balanced approach to life and work.

Boomers felt the 2008-2009 crash during their 40s, 50s, and 60s; the times of life when retirement discussions get real and saw substantial drops in financial markets. During the Great Recession, Millennials were just entering the job market and faced historically high unemployment rates. Many millennials were forced to delay marriage, families, and home ownership, and weren’t heavily invested in the market, missing out on the upside when it bounced back.

Both generations witnessed the longest sustained bull market in history. Boomers were able to make up for lost time, yet Millennials have remained a step behind, as they didn’t have equal resources for investments.

So why the split? Millennials have never seen a prolonged bear market. Old-style pension plans rarely exist today, 401(k) plan participation is high, and the long-term viability of Social Security is up for discussion. Millennials watched venture capital and tech creating overnight millionaires. FOMO (fear of missing out) is real for Millennials as the AI wave suggests possible further market expansion.

Boomers remember the dot-com era when Pets.com was the posterchild for the collapse. Who can forget the company’s sock-puppet mascot! Most dot-com names didn’t develop sustainable business models and often went bankrupt shortly after their IPOs (initial public offerings). Reckless spending without products or earnings was the theme of the dotcom collapse.

Today’s growth companies are far different and associated with established businesses. The leading companies of the AI era are essentially the 21st-century establishment. The AI era differs from the dot-com bubble because companies today are building technology that can perform pattern recognition, problem-solving, content creation, and more. Dotcoms were only about having website presence and not fundamentals. AI is about capabilities, not just a location shift from physical to online with dotcoms.

Generational experiences and relationships with technology created different preferences on how to receive investment advice. Over 51% of Baby Boomers work with advisors, use traditional financial media outlets for information, and trust social media far less than Millennials do. Millennials embrace innovation, are comfortable with digital platforms, robo-advisors, mobile apps, and online communities. They’re more open to AI-enabled financial advice, with 41% saying they’d allow AI to manage investments, vs. only 14% of Boomers, according to weforum.org.

With Boomers being closer to (or in) retirement and holding the largest portion of U.S. wealth (approximately $89 trillion), they tend to prioritize capital preservation, income, tax efficiency, providing a larger cushion for conservative strategies.

Millennials hold approximately $26 trillion in wealth and thus may seek higher-return assets to catch up while they juggle childcare, housing costs, and student loans while they’re in the accumulation phase. They often begin investing earlier in life, starting at age 25 vs. 35 for Boomers, because of education and the ease of digital access.

These generational differences will continue to shape the market’s direction and culture, especially as the transfer of wealth continues from Boomers to Millennials. Both groups may share the same goal of building financial security, but they often take different paths.

Boomers are typically concerned about protecting decades of accumulated wealth. Millennials are focused on trying to build wealth under more challenging economic conditions. It makes sense that the two generations invest differently based on life stages, technology, experiences, economic history, and risk tolerance. Stay focused and plan accordingly.