While Most Don't Equate Success with Wealth, Money Named as Their Biggest Concern

BOSTON, August 28, 2008 - Fidelity Investments today released new research on Generation X and Y¹, whose combined population will represent 60 percent of the U.S. workforce by 2010². The research indicates that when it comes to how both generations view and make decisions about money, they are often conflicted between their intentions and actions.

The findings were the culmination of a four-month, multi-tiered ethnographic and quantitative research study consisting of about 1,200 adults between the ages of 20 to 40 years³. The research revealed five areas of conflict for both generations around career decisions, savings perceptions, Internet adoption, financial guidance and workplace savings plan usage.

1) Money is the top concern, but work/life balance drives career choices.

•		When asked about what keeps them up at night, nearly eight out of ten respondents (77 percent of Gen X, 74 percent of Gen Y) named money as their biggest concern, well above concern over family relationships or healthcare.
•		However, money doesn't drive their career choices. Both Gen X and Y agree that career decisions are primarily driven by their quest for work/life balance (70 percent Gen Y, 63 percent Gen X).

2) Gen X/Y agree that saving for retirement is a goal, but other financial priorities and managing debt are more crucial.

•		Fifty percent of Gen X/Y (55 percent Gen X, 44 percent Gen Y) list saving for retirement as a current obligation or goal.
•		However, more than half (51 percent Gen X/Y) indicate other financial priorities prevent them from saving for retirement. When compared to saving for retirement, managing everyday finances, making mortgage payments and managing credit card debt all rank higher as crucial goals for both Gen X/Y.
•		For Gen Y, saving for retirement is even less crucial, with making car payments, paying off school loans and saving for a home also ranking higher.

"Debt prevents saving in older generations as well, but it's especially a challenge for Gen X and Y," said Pamela Norley, executive vice president, Fidelity Consulting Group. "Our research revealed that younger generations are more likely to use credit than save for short-term purchases, which results in an ongoing struggle with debt management."

3) More than half couldn't say they were making good financial decisions, yet a significant number were not seeking any guidance.

•		Most Gen X and Y don't feel confident that they are making solid financial decisions. Sixty-two percent of Gen X and 57 percent of Gen Y couldn't say they were making good decisions about their finances.
•		Parents are the No. 1 resource that both generations turn to for help and guidance on financial matters (43 percent Gen Y, 28 percent Gen X).
•		However, nearly 1 in 5 didn't turn to any resource for help on financial matters. In fact, when changing jobs, 41 percent didn't seek any guidance regarding their workplace retirement assets. Of this group, 56 percent cashed out of their workplace savings plans.

4) A workplace retirement plan (e.g. 401(k), 403(b)) is their No. 1 tool for savings outside of their banking account, yet four out of 10 are cashing out assets from their workplace savings plan when changing jobs.

•		When utilizing savings vehicles beyond their everyday savings account, their workplace savings plan (54 percent Gen X, 46 percent Gen Y) is No. 1, far outpacing IRAs, CDs and stock/bonds/mutual funds.
•		Fifty-two percent of Gen Y (with a workplace retirement plan) anticipate leaving their job within five years, with 31 percent of Gen X making the same statement.
•		Yet when changing jobs, 40 percent of Gen X/Y cash out of their workplace retirement plan.

"For many young people, workplace savings plans are often their very first experience with investing," said Scott B. David, president of retirement services, Fidelity Investments. "While it's encouraging to see that more than half are saving through their workplace plan, the cash out rate is concerning. Employers and service providers need to work together to help this generation understand the long-term implications of cashing out and options to help their money to potentially continue to grow."

5) Being able to do all banking online is important, but surprisingly many younger investors still want a brick and mortar presence.

•		Seventy-two percent of Gen X and 78 percent of Gen Y state that being able to do all banking online is important to them. In fact, 49 percent of Gen X/Y consumers are spending at least one hour a week paying bills or banking, while fewer spend the same time on social networks (39 percent) or blogging (14 percent).
•		But even more want a local branch nearby to rely on, with 87 percent of Gen X/Y saying it's important.

Innovative Approach to Generation X/Y Research

Fidelity used a unique research approach to understand the needs of Generation X and Y. The ethnographic research was conducted by CMI and consisted of 40 adults between the ages of 21-35 across four geographic markets. The research encompassed blogging assignments, in-home interviews and focus groups. The results from the ethnographic work informed a broader quantitative research study conducted by Burke, Inc. which consisted of about 1,200 financial decision makers (age 20-40) in the U.S. with at least $15,000 in annual income. Data for Fidelity's Generation X/Y Research was collected between October 2007 and January 2008.

"These generations communicate and learn so differently than previous investors that we had to look at a completely different approach to understand their mindset and behavior," said Norley. "This research will help inform product development in the future to ensure relevance with these investors." Fidelity currently provides workplace and retail products, from 401(k) plans to IRAs, to approximately 5.6 million Gen X and Gen Y investors.

About Fidelity Investments

Fidelity Investments is one of the world's largest providers of financial services, with custodied assets of more than $3.2 trillion, including managed assets of $1.5 trillion as of July 31, 2008. Fidelity offers investment management, retirement planning, brokerage, and human resources and benefits outsourcing services to 24 million individuals and institutions as well as through 5,500 financial intermediary firms. The firm is the largest mutual fund company in the United States, the No. 1 provider of workplace retirement savings plans, the largest mutual fund supermarket and a leading online brokerage firm. For more information about Fidelity Investments, visit Fidelity.com.

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Burke, Inc. and CMI are not affiliated with Fidelity Investments.

Fidelity Brokerage Services LLC, Member NYSE, SIPC

¹ Generation X born between 1967-1975, Generation Y born between 1976-1987

²Bureau of Labor Statistics, Monthly Labor Review, May 2002

³Research conducted by CMI and Burke, Inc. for Fidelity Investments, October 2007-January 2008