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In what could be good news for the long-term health of the advisory business, data confirm that young people want to learn about finance and investing. And in this case, “young” means high schoolers, indicating the forecast for youthful Americans and finances is perhaps brighter than it’s given credit for.
Not surprisingly, most kids – 80% to 90% depending on the survey – say they learn about finances from their parents. There’s nothing wrong with that, but as advisors know, not all parents are finance or investing experts and many lack the time to adequately address these important topics with children.
In theory, schools should pick up some of the slack. However, just 25 states require that students take a financial literacy class to graduate high school while just two more – North Dakota and South Dakota – mandate that such classes be offered.
Making matters worse is a 2023 survey by the Center for Financial Literacy at Champlain College indicating that just seven states -- Alabama, Iowa, Mississippi, Missouri, Tennessee, Utah and Virginia – garnered “A” grades for the financial literacy offerings in public high schools. Certainly, it’s not on advisors to effect education policy, but they can contribute to arming clients’ children with solid financial foundations.
It’s Worth the Effort
Data confirm that there are significant gaps in financial literacy among young people, indicating that schools and parents aren’t doing enough to fill those voids.
“The new Intuit Financial Education survey, out today, found that 85% of U.S. high school students say that they are interested in learning about financial topics in school, and 95% of students who currently receive financial curriculum find it helpful,” according to an Intuit survey.
Those numbers don’t include Gen Zers in college and those in the workforce that are new to investing and managing their finances. Add it all up and it’s safe to say that many clients with kids in say the 15 to 25 age bracket would see considerable value in an advisor providing some level of basic financial education to the kids or empowering the parents with the tools necessary to do so on their own.
Due to the fact that financial literacy hasn’t been widely embraced in schools as of yet (fortunately, that’s changing), many advisors may overlook this opportunity, but it could be a compelling avenue for adding value and increasing client retention.
More Points to Consider
For various reasons, younger people have gotten bum reps in the financial services community, but there are greenshoots among current high school students. It’s often believed that the primary financial aim of young folks is to “get rich”, but the Intuit survey that applies to just 43% of those polled.
Conversely, 77% want to learn how to save or avoid accumulating debt – encouraging points to be sure.
Add to that, just 19% of those polled by Intuit confess to getting financial advice on social media while, in another positive sign, 59% are leery of the quality of financial advice they find on those platforms.
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