Financial risk profiling of millennials

Purpose This study aims to assess the risk profile of millennial investors residing in the Delhi NCR region. In addition, the relationship between the risk profile and demographic traits of millennial investors was also analyzed. Design/methodology/approach Data was collected using a structured questionnaire segregated into two sections. In the first section, millennials were asked questions on socio-demographic factors, and the second section contained ten Likert-type statements to cover the multidimensionality of financial risk. Factor analysis and one-way ANOVA were used to analyze the primary data collected for this study. Findings The findings indicate that the risk profile of millennials is mainly affected by three factors: risk-taking capacity, risk attitude and risk propensity. Except for educational qualification and occupation, all other demographic features, such as age, gender, marital status, income and family size, seem to significantly influence the factors defining millennials' risk profile. Originality/value Uncertainty is inherent in any financial decision, and an investor’s willingness to deal with these variations determines their investment risk profile. To make sound financial decisions, it is mandatory to understand one’s risk profile. The awareness of millennials' distinctive risk profile will come in handy to financial stakeholders because they account for one-third of India’s population, and their financial decisions will shape the financial world for the decades to come.