Trending
As advisors know, the generations that get the most attention in the financial services community are baby boomers and millennials, but Gen Z are making a run at related fanfare, too.
The age range for Gen Z is 13 to 28, meaning more than half of the demographic isn’t in the workforce and a significant portion isn’t even in college. However, that doesn’t imply advisors can sit idly by and wait for Gen Zers to age and accumulate wealth.
Actually, advisors should be proactive in courting Gen Z clients that are currently in the workforce while readying client acquisition strategies applicable to younger members of this demographic because data indicate many Gen Zers will enter adulthood lacking adequate financial literacy. Laying the blame for that scenario is a conversation for another time, but what’s important here and now is that many Gen Zers feel as though they don’t have prop grips on investing and personal finance and they’re going to seek professional guidance to ameliorate that situation.
Gen Z Could Be Growth for Advisors
In what can be construed as good news for advisors, some financial views held by Gen Z and millennials aren’t too different from their older counterparts. Younger folks value milestones such as home ownership and accumulating savings to fund education for their children, among other important points. Still, they need help to recognize those goals.
One hurdle Gen Z is encountering on their financial journeys is normalization of debt. Whether it’s consumer debt or student loan obligations, Gen Z, like their older counterparts, are taking on too much debt and perhaps rationalizing it because it’s seen as “normal.” That makes the need for financial literacy all the more important.
“More than 50% of Gen-Z – and a substantial portion of all other generations – enter adulthood without any formal financial education,” according to Credit One Bank.
One thing for advisors to note as it relates to clients that are parents of Gen Zers is the point that these young people are more dependent on their parents for financial guidance than were baby boomers and Gen Xers.
“Older generations like Baby Boomers were more likely to be self-taught in comparison to Gen-Z and Millennials who relied more on parents or guardians,” adds Credit One.
An Encouraging Fact About Gen Z
An interesting issue that I wrote about extensively last year is the taboo lens through which money is viewed in personal relationships. For various reasons, men and women would rather discuss politics and religion than money on dates and when it comes to relationships, people would rather discuss their sexual pasts than finances with their significant others.
On that note, and this is something advisors should be encouraged by, Gen Z is more open about discussing money and that could portend a willingness to work with advisors in the future.
“33% of Gen-Zers surveyed openly discuss money with their families, compared to 6% of Baby Boomers surveyed,” concludes Credit One.