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Written by: Jay VealeProud of your latest Millennial hire? You may want to consider the fact that Gen Z, the generation after Millennials, has already begun graduating college and are looking for our first jobs. We have been raised on technology, have a dramatically different take on financial planning and advising than Millennials, and could be the perfect match for your RIA. But first, let’s get to know each other a bit more.
Who is Gen Z?
Generation Z consists of those born between 1995 and 2010. We are digitally native, and don’t know a time before the Internet. While we also look for engaging, fulfilling places to work in (just like Millennials), in lieu of a “fun” work environment or flexible hours, we primarily look for financial stability– namely strong compensation and benefits packages. Seeing our parents and older siblings struggle through The Great Recession shook our faith in traditional financial institutions and has led us to rely not on banks or Social Security, but to seek more entrepreneurial or creative financial solutions. These trepidations have propelled many of us to self-educate on personal finance, and to place more value on financial advising and planning than Millennials. With this financial philosophy, Gen Z would naturally be attracted to the world of independent advisory firms, but with 60% of the current workforce being Gen X and Millennials, we are often overlooked.
Why Employers Should Prioritize Gen Z
While we are just beginning to graduate, Gen Z is anticipated to make up 20% of the workforce by 2025, only five short years away. This, coupled with the fact that 28% of current advisors are looking to retire within 10 years with no succession plan in place, will lead to a dramatic demographic shift in the industry. Focusing on mapping out career paths and bringing in the freshest talent that would grow with the firm would ensure that an advisor’s practice can transform from a personal book of business to a legacy enterprise that can endure for generations to come.To be competitive in the not-too-distant future, firms will need to compete in an increasingly digitized world, provide more holistic services, and define their niche in a saturated investment advisory marketplace– all challenges that Gen Z is readily suited to provide support. By leading lives that are so interwoven with technology, we can quickly learn new systems, and we live on the leading edge of technology that can help bring both new back-end efficiencies and front-facing offerings to the workplace. We are also considered to be the most empathetic generation due to our underlying drive to change the world through helping others and would be driven to go above and beyond when addressing clients’ complex needs.Numerous industry experts, especially Michael Kitces, have been urging firms to find their niche. Whether it is airline pilots, professional athletes, or religious communities, every RIA needs its own niche to be able to sustain organic growth. As Gen Z is the most diverse generation in history, we can help RIAs by providing a diversity of backgrounds and perspectives that can help define and greater serve whatever specific niche your firm might move toward. As a guest on PFI Advisors’ COO Roundtable podcast, BNY Mellon Pershing’s Mark Tibergien stated, “People in the advisory business have to be thinking about how to create diversity… because it reflects what our industry should be. It’s diversity in perspective, diversity in experience, and frankly, it’s a reflection of the face of the communities that we serve.”
What Gen Z Thinks of Wealth Management
We don’t. Before joining PFI Advisors four months ago, I didn’t know an IBD from a wirehouse and I certainly had no idea what an RIA was. However, as soon as I got started, I began voraciously consuming industry content as the more I learned about independent wealth management, the more I wanted to know.The entrepreneurial nature of an RIA, the opportunity to make a direct impact on the company that we work for, and the ability to make a positive impact on others’ lives by helping them achieve their financial goals is appealing to Gen Z. However, with a lack of education or marketing around this industry to our generation, we have no clue that it exists. In the minds of most college students these days, a job in finance largely consists of working at an investment bank or an asset manager. Our perception of financial planning, for the most part, is budgeting or investing applications on our smartphones and we don’t yet realize that we can create a fulfilling career out of it. The good news? This means that we are a largely untapped labor market, ready to discover you.
How to Get Our Attention
To hold our true interest, RIAs need to offer more than opportunities for good compensation. Benefits packages are something that have come under fire in recent years as the gig economy has taken hold of the job market, and while flexible hours are always a plus, Gen Z prioritizes healthcare and retirement saving above having the flexibility to set our own schedules.We also are looking for upward mobility. We’re not looking to toil in the same entry-level role forever, so being able to demonstrate a very clear career path for new hires will ensure that we won’t just join for a year or two and then jump ship. We want to be as thoughtful about how we invest in you, as you are in us.We can certainly help each other grow and succeed as Gen Z launches into the brave new world of wealth management. It just takes finding and getting to know each other in order to help us both reach new heights.