Skip to main content

The world is changing at an increasingly rapid pace, and the landscape of the financial advisory sector is no exception. As “baby boomers” (those born between 1945 and 1964) reach their retirement years, financial advisers are beginning to look at the next generation of investors who are quickly coming of age: Generation Z.

If you’ve heard the phrases “Ok boomer” (usually said sarcastically in response to any advice or suggestions made by a baby boomer) and “yeet” (we’re still trying to figure out exactly what this means), you’ve likely heard them being uttered by a “Gen-Zer”.

Gen Z or “Zoomers” are teenagers and young adults born after 1995. They’re the fastest-growing consumer demographic, having made up 40% of consumers in 2020 and holding an estimated $140 billion in collective spending power.

For IFAs and investment managers, understanding the needs and priorities of this generation is key to reaching and serving them to acquire new business. Here, we review the investment interests and trends of Generation Z and what strategies financial advisors can use to appeal to them.

Who is Gen-Z? Defining the New Generation

Generation Z is the first generation of true digital natives, meaning they’re too young to remember a world without Google, smartphones, and instant access to information and services. This instant access to nearly everything has helped shape the goals and priorities of Gen Z, but that’s not all.

As the children of Gen X (born between 1965 and 1983) and Gen Y or “Millennials” (born between 1983 and 1995), Gen Z have witnessed the negative effects that the 2008 economic recession has had on their parents and family members.

They also watched their Millennial predecessors take on massive amounts of student loan debt and struggle to find secure employment in an increasingly unstable market. Thus, they’re less likely to follow the same paths of previous generations when it comes to financial planning and goals.

How do Gen Z’s needs and priorities differ from previous generations?

The good news is Generation-Z is more interested in investing for the long term than debt-weary Millennials. According to a study, Gen-Zers begin actively researching financial planning strategies from as early as age 13, and 89% say that planning for their financial future makes them feel empowered.

Here are some other defining values and attitudes that make up the mindset of Zoomers.

They are more environmentally aware

Generation-Z has stronger views and opinions on climate change than previous generations and is more environmentally conscious. They prefer to opt for “impact investing” which is purposefully investing in companies and businesses that have demonstrably positive effects on the environment and are “green” in their methods and output.

They are extremely socially and politically active

Gen-Z is a very vocal generation and has learned to harness the power of the internet and social media to make their voices heard. They care about fairness, representation, and racial and gender equality, and they are not afraid to boycott businesses that don’t demonstrate these values.

They are interested in tech and startups

Having grown up in a world constantly reshaped by new technology, Generation-Z is interested in the opportunities that innovative technologies can leverage. They’re particularly interested in tech and startup companies that they can directly benefit from, such as e-commerce platforms, apps, and services.

They’re looking for multiple streams of income

Gen-Z has learned from watching Millennials take on debt to get through university and struggle to find secure employment. As a result, they’re sceptical of the promise that a university degree and education will result in a good job. While they’re still interested in tertiary education, they’re prioritising educational courses based on job demand, not personal interest. Gen Z is also more interested in being their own boss, instead of working for one.

While this once sounded like a hefty process, the power of social media and e-commerce has enabled Zoomers to lift their own businesses off the ground with the right skills and internet connection. They’re also more willing to juggle several different jobs to produce multiple income streams, compared to the traditional “one job, one boss” work model previous generations preferred.

Finance marketing strategies that will reach Gen-Z investors

While technology has helped to shape the defining characteristics of Generation Z, it’s also helped form some challenges, namely how exactly do you reach a sceptical generation raised on social media and smartphones? It might sound intimidating, but there are certain avenues you can take to market to younger investors.

Go digital

Gen Z is used to doing everything online, even interacting and the COVID-19 pandemic has only reinforced this. Offering digital consulting services that they can engage with on a mobile platform will be more appealing than only offering traditional, face-to-face meetings. A prime example of how to harness the digital sphere for marketing is Dr. Gizelle Willows, a financial consultant who actively shares and promotes healthy financial habits through entertaining and quirky videos on her Tik Tok account.

Expand your reach online

In addition to offering digital consulting, you can reach Gen Z investors by embracing marketing on online platforms. Social media channels like Youtube and Tik Tok are most used by Gen Z and can be used to reach potential leads. While it may initially be a push out of your comfort zone, many businesses are already actively marketing to younger consumers on these platforms powered by relevant hashtags.

Benefits first, features later

Zoomers have grown up in the age of instant answers and have a shortened attention span than previous generations. They want reasons why they should give you their attention upfront, so it’s better to focus on benefits and rewards first, and once their attention is piqued, focus on specifics and how-tos.

As Generation Z continues to come of age, they’ll bring more changes and disruptions to the status quo. Beyond Gen Z, generational shifts and evolutions will continue to impact and determine the future behaviour of consumers.

IFAs need to stay on top of these emerging trends and constantly rethink how they can build relationships with and deliver valuable experiences to their clients.

“Live as if you were to die tomorrow. Learn as if you were to live forever.”

Mahatma Gandhi