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Countless questions about Generation Z investors exist. Are direct messages on social media their preferred communication channel? Are they interested in making alternative investments? How many of them actually fear phone calls? The truth about this demographic is more complex than it may seem at first glance.
1. A Lack of Substantial Savings
Many younger adults have less than an entire paycheck saved up. According to a survey from Forbes Adviser, around 32% of Gen Z had less than $1,000 in savings in 2024. Another 21% had saved $1,000 to $5,000, while just 10% had $5,001 to $10,000.
While a good rule of thumb is to have three to six months of living expenses in an emergency fund, people in this demographic face financial instability. Many entered the workforce or began attending college during the COVID-19 pandemic. As a result, they have struggled to find high-paying jobs or careers in their field.
Of course, this lack of savings is likely temporary. Older Americans will pass down an estimated $84 trillion in assets to their heirs through 2045. Financial advisers should be aware of this impending liquidity. Soon, an influx of Gen Z will need help navigating a sudden windfall.
That said, some already have multiple investments. Data from a survey from the CFA Institute and the Financial Industry Regulatory Authority shows Gen Zers invested a median of $4,000 in 2023. Industry professionals should expect those with liquidity to have either very little or a lot of funds.
2. Limited Financial Knowledge
According to a recent survey, around 25% of Gen Zers say they lack confidence in their financial skills and understanding. Despite living in the information age, many don’t prioritize education. After all, retirement is decades away at this life stage.
Financial advisers should be aware of this knowledge gap when generating leads or working with Gen Z clients for the first time. They may need basic terminology explained to them, but may not ask for fear of seeming unprepared.
3. A Desire to Use the Latest Tools
Gen Z grew up in the digital age, which turned many into computer-literate technology enthusiasts. When spending or investing, many see the value in using the latest solutions. They are among the top users of contactless payment tools, financial apps and mobile banking.
A surprisingly large percentage of young adults feel confident about unproven financial technologies. For instance, although artificial intelligence is relatively new, 37% of people in the United States say they are interested in using it for money management.
Industry professionals should embrace the latest technologies. They don’t need to build a chatbot from the ground up — an app, direct deposit option or virtual portal would do just fine. This way, they can generate more appeal than cheap state-of-the-art robo-advisers.
4. A Strong Interest in Cryptocurrency
Cryptocurrency has caught the attention of young people. According to a 2022 survey, 54% of Gen Z prefer to invest in this type of asset, a higher percentage than those investing in mutual funds, exchange-traded funds, retirement accounts or real estate.
The appeal of virtual currency is decentralization — individuals can move or withdraw their funds without visiting a bank branch in person or waiting for permission from a central authority. More control and less oversight are preferable to those prioritizing growth-focused investments because they believe they can maximize their return on investment.
Many of these investors are confident in this approach. According to an Investopedia survey, 24% of Gen Z expects their largest returns will come from cryptocurrency. Interestingly, 20% believe it is on par with savings and plan to use it to support themselves in retirement.
Financial advisers must recognize the importance of cryptocurrency. While this investment vehicle is far more volatile than retirement accounts, real estate or stocks, it remains popular. Professionals must stay up to date on strategies and coins to make practical recommendations.
5. A Tendency to Rely on Social Media
Young people get most of their news and entertainment from social media, so it’s unsurprising they go to the same platforms for financial advice. In fact, around 34% of Gen Z has been influenced by a financial influencer before.
This generation’s tendency to listen to influencers, AI voiceovers and user-generated content over financial professionals is unorthodox, but not unexpected. Gen Zers grew up surrounded by advertisements and digital marketing, so word of mouth, forums and social media may feel more trustworthy and genuine.
While industry professionals don’t typically prefer cold calling, outreach is essential for engaging a demographic that generally distrusts institutions. Modern lead generation involves building a following — or at least being discoverable — on social media.
6. A Preference for Casual Communication
The notion that every person under 30 has a phobia of making phone calls is far from accurate. While an unexpected call may make some panic, many simply prefer other less invasive forms of communication.
Gen Zers are used to being constantly plugged in. Approximately 50% of their waking hours are dedicated to screen time, prompting the assumption that they should be reachable at all hours. Moreover, many have experienced years of spam calls and phishing emails.
Financial advisers must understand this demographic’s communication preferences to secure leads and keep clients. While most want remote interactions, many prefer text messaging or live chat over video conferencing or phone calls.
7. A Pervasive Fear of Missing Out
Many young people have a fear of missing out (FOMO). Even as pump-and-dump crypto schemes proliferate, the success of virtual currencies like Bitcoin and Ethereum has driven substantial interest in various unproven cryptocurrency investment opportunities.
For instance, many bought the meme coin Hailey Welch — the “Hawk Tuah girl” — launched despite her having no background in cryptocurrency. Her digital coin reached a $490 million market cap before losing 95% of its value within hours. The influencer had initially generated excitement about her product online, fostering FOMO.
The desire to participate in a trend may drive Gen Z’s financial decisions. Industry professionals can use this knowledge to help clients develop reliable spending, saving and investment strategies.
The Truth About Generation Z Investors
While the misconceptions about instant gratification, alternative investments and phone call anxiety are rooted in truth, the reality is different. Financial advisers must understand what to expect from Gen Zers if they want to generate leads, keep clients and invest in the future.