The Bank of New York Mellon (NYSE:BK) released a new study showing that the life insurance industry is failing to connect with millennials—individuals born after 1980 who have to save more of their earnings than their parents over a longer period.

The Bank of New York Mellon (NYSE:BK) believed that it was important for insurers to understand that challenges confronting the industry in adapting to a new wave of clients who have a different outlook such as the millennials. The bank commissioned a study to understand the perception of the millennial generation about financial planning.

The Generation Games: Savings For the New Millennial, a whitepaper released by The Bank of New York Mellon (NYSE:BK) revealed that millennials are more likely to seek financial advice from their parents.

In fact, the study found that 52% of millennials turn to their parents to seek advice regarding financial planning as they perceived them as trusted and experienced agents than other sources amid an uncertain and complicated world. Only 24% would seek guidance from their banks while 2.8% would contact an insurance company.

BNY Chart- Sources of Financial Advice

The Bank of New York Mellon (NYSE:BK) Insurance Industry Lead, Paul Traynor said, “We cannot say, and do not know, whether their parents are equipped to advise them correctly – but we know that half of our respondents do not know how a pension works, and we know that insurers do not even make the shortlist of ‘go-to’ places for financial guidance.”

Sources of financial advice

The study found that millennials are more likely to seek advice from other sources before making a financial decision. When asked to rank seven sources of advice, (average rankings closer to 1 means more popular) parents scored 2.36 points followed by banks 2.55 points, financial advisers 3.05 point, friends 3.64 points and insurers 4.75 points. Insurer agents and school teachers were ranked sixth and seventh with 4.87 and 6.03 points, respectively.

Millenials believe personal savings are essential part of retirement

The study revealed that Fifty three percent (53%) of millennials believed that personal savings is an important part if their retirement, 36% stated employer contributions to a national savings scheme and 31% mentioned the government.

Millennials do not believe that they will benefit from the same levels of state and employer sponsored pension income that their parents are entitled to receive.

Sources of retirment income

Two-thirds of millennials trust financial services

The report found that two-thirds of millennials or 65% trust financial service providers to obtain a secure retirement, but they do not appear to trust them with providing advice and guidance on retirement saving.

Millennials indicated that millennials do not want financial service providers to connect them through social media. Only less than 1% of the millennials wants to engage with financial service providers through social media and the majority thinks it is “silly, pally or creepy.”

Forty percent (40%) prefer communication with financial service providers through e-mail/website, 23% mentioned face-to-face/in branch communication while 18% said through telephone.

Millenials preferred form of contact

The study also found that 59% of the millennials believed that they had not seen retirement savings products intended for them. The current products do not appeal to millennials because it fails to show a connection between the present and the future. They want retirement products to demonstrate clearly that they will be rewarded for tying up their money.