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Gen Z, the generation born between 1997 and 2012, is the youngest of the four age demographics (the others are in descending order, baby boomers, Gen X and millennials) and on the surface, that youth can present some challenges for advisors.
Advisors need not fret when it comes to Gen Z. Start with the basics. It’s not a stretch to say that nearly all Gen Zers born after 2001 aren’t yet in the market for financial professionals, so advisors can focus their efforts on the oldest members of the group. Some of them will be 30 years old before they know it, implying they’re apt to be increasingly interested in working with advisors.
Of course, there are factors germane to Gen Z that advisors need to be aware of. Those include the demographic’s tech-savvy nature, limited savings, deep interest in cryptocurrency and relatively scant financial education, among other issues. When it comes to investing and saving, many Gen Zers are self-educated, rely on social media, get tips from friends and family, or all three.
Gen Z Not That Different
Advisors wanting to achieve success with Gen Z can do so with ease by starting with a simple point. Don’t make their youth the issue. Rather, understand the point that Gen Zers have many of the same concerns as their older counterparts, including being able to afford a house and saving for retirement.
“According to Nationwide’s tenth annual Advisor Authority survey, just being able to retire is a concern for Gen Z investors, with 14% saying that they do not expect to retire at all. This percentage was somewhat higher than non-retired members of other generations and shows that Gen Z could use some financial guidance when it comes to retirement,” according to Nationwide.
As advisors know, clients across all age groups are concerned about retirement. It’s likely one of the biggest reasons why people work with advisors in the first place. For as important as retirement planning is, it’s not the only thing Gen Zers have in common with clients in other age brackets.
“The Advisor Authority survey found that Gen Z, like non-retired members of the older generations, were most concerned about inflation (40% of Gen Z, 38% of Millennials, 40% of Gen X, and 43% of Boomers) being the biggest challenge to their retirement, followed by increased cost of living (34% of Gen Z, 34% of Millennials, 40% of Gen X and 46% of Boomers),” adds Nationwide.
Gen Z = Opportunity
As Nationwide points out, two-thirds of Gen Zers currently don’t work with advisors. Arguably, that percentage is low when considering just five of the 16 birth years in the demographic are in the workforce today. Still, that 67% implies there’s plenty of room for growth regarding the advisor/Gen Z union.
How those relationships are built matters, too. Translation: advisors need to realize Gen Z wants access to artificial intelligence (AI), crypto and socially responsible investments.
“Gen Z and Millennials (both 14%) found it influential that a financial professional uses or has knowledge of AI, at least somewhat more than older generations (11% Gen X, 6% Boomers). There are ways to integrate AI into your practice that can help attract younger clients while also potentially improving the efficiency of your business,” concludes Nationwide. “It’s a win-win.”