About this paper

Millennials and Gen Z are now the largest generational cohorts, with the power to influence consumer and market trends over the next decade. Yet, these cohorts are also caught in the tidal waves between the economic impact of a post-Covid-19 world, and broader structural shifts like digitalisation and the future of work.

Given these changes, it is important that policymakers and industry players alike understand how millennial and Gen Z Malaysians think about their money, as this will highlight the direction that policy and the industry should take to remain relevant and impactful. Against this backdrop, the aim of this research study was to understand:

• How are young Malaysians managing their money currently, and how will they be doing so moving forward?
• What are the challenges and issues faced by young Malaysians when it comes to saving and investing?
• What are the beliefs, attitudes and behaviours of young Malaysians that shape the way they think of their personal finances?

To answer these questions, ICMR ran a nationwide quantitative survey of 1500 respondents, and conducted supplementary qualitative interviews for deeper understanding and nuance. Some of the key findings from this research are:

• Some aspects which provide insights into whether an individual invests in capital market products, and what kind of capital market products they invest in, include their household income, financial knowledge, financial confidence, and risk tolerance
• Those who practice better financial habits and make more informed financial decisions tend to be self-aware of their own behavioural biases, and take active steps to mitigate it
• Online platforms remain the most popular source of information, which could be a double-edged sword. While the abundance of financial education resources online has been useful to those seeking for it, it is also not reaching the ones who may need it most
• Trust and relatability are important values to the millennial and Gen Z cohort, and peer group influence plays an important role in their decision-making
• There is increasing interest in investing for good, as well as direct investing into businesses

This research study highlights that an individual’s financial attitude and behaviour can be linked to their income, financial knowledge, risk tolerance, and confidence in financial knowledge. This research study further attempts to understand and explain “actual” investor behaviour, which differs from mainstream finance that is based on assumptions of how “rational” investors should behave.

The purpose of this study is also to propose a renewed mandate for financial literacy programmes and initiatives that utilises behavioural insights to incorporate the right tools, self-awareness, and techniques to help individuals navigate their personal finances.

This research study highlights the importance of adopting a nuanced and tiered approach when thinking of investors as they are not “one-size-fits-all”, even if within the same generational cohorts. Given the delicate balance between investor protection and investor empowerment, a tiered approach when it comes to policy and products will cater for individuals at different stages of readiness.

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