For Gen Z, tech is money

Young savers are embracing a new form of self-directed investing and are actively investing online. For advisors, connecting with this group of next generation clients presents a unique challenge and opportunity.

Who is Generation Z?

Gen Z, those born between 1997 and 2012, totaled 67 million in 2020, representing about 20% of the total population, according to the Census Bureau. Gen Zers put a higher emphasis on personal savings, care about social issues, and making a positive impact.1

Gen Z has the fastest-growing income worldwide. Globally, their income is expected to grow to $17 trillion by 2025 and $33 trillion by 2030, representing a very substantial 27% of the world's income and surpassing that of Millennials.2

And Gen Z has money to invest and decisions to make. They started saving for retirement at age 19, earlier than other generations, compared with Millennials (age 25), Gen Xers (age 30) and boomers (age 35). Fully 70% of Gen Zers have started saving for retirement.3

Living in a digital world

Gen Z's relationship with money is based on a purely digital experience. Why use cash when there's Venmo? Why use a traditional brokerage when there are platforms to choose that require no minimum and offer free trades? Why hunker down and do fundamental research on valuations when TikTok finfluencers deliver rapid, timely recommendations?

Even with an early start at saving, only 43% of Gen Z are optimistic about reaching their retirement goals, compared with 53% of all other generations. And 51% said they are not sure what 401(k) investments to choose to have enough to retire.4

Sources of financial information and education vary and include everything from YouTube to TikTok and other social channels.

Gen Z's primary sources of financial education

Gen Z primary sources of financial education


Many Gen Zers are more interested in cryptocurrency or NFTs than traditional, more transparent investment vehicles. A recent survey found Gen Zers are saving more than they are spending, and identified their preferred investments. Some may surprise!

Gen Z's preferred investments

Gen Z preferred investments


A 2021 Harris poll for CNBC found that 19% of Gen Z often or exclusively use investments focused on ESG (environmental, social, and governance) factors, second only to Millennials (30%), and compared with 16% of Gen X and 2% of baby boomers.

Gen Z says they need advice

Concurrent with moving ahead on their own, many Gen Zers acknowledge they need advice. The majority of Gen Zers (71%) in a recent survey said there are financial topics they want advice on but don't know where to find it. About two thirds of respondents said a financial plan based on their goals would be an important factor if they were considering a financial advisor.5

For some, the pandemic moved them to hire an advisor. In a study of investors who began working with an advisor since the pandemic began, Gen Zers topped the list. The biggest segments of new advised-clients were Gen Z (22%) and Millennials (22%), compared with 19% of Gen X and 10% of boomers.6

The opportunity for advisors

Advisors looking to connect with Gen Z need to meet them where they are, learn about emerging investment vehicles and styles, and structure their practice to make connections easy and efficient.

  • Understand Gen Z's needs. 35% cite paying off student debt and 33% cite saving for retirement as financial priorities.7
  • Learn about crypto, NFTs, and other investment ideas. Be able to express the relative risk/return profile of newer, more volatile vehicles versus traditional mutual funds, ETFs, and individual securities.
  • Get up to speed on ESG investing. 95% of GenZers are also interested in ESG (environmental, social, and governance) and impact investing.8
  • Provide an organized, frictionless experience. Use technology like DocuSign, Zelle, and Venmo to eliminate paper documents and check writing. If allowed by your firm, default to texting over email when communicating.
  • Carefully craft your online image. With some easy updates and routines, you can reach out to these active investors looking for information and advice.
    • Optimize your LinkedIn profile. Ensure that your profile photo is current, casually professional, and inviting. Fill in your complete educational and professional experience.
    • Fine tune your value proposition. Use keywords and phrases in your LinkedIn Summary to communicate your ability and readiness to work with Gen Z clients.
    • Start sharing articles. Focus on key investment topics that are of interest to Gen Z investors, like student loan debt, saving for goals such as a home purchase, or the growth of ESG investing.

1. Deloitte, 2021.

2. Bank of America, 2020.

3. Transamerica Retirement Survey 2021.

4. Schwab, 2021.

5. Intelliflo, 2021.

6. Northwestern Mutual, Harris Poll 2021.

7. Transamerica Retirement Survey 2021.

8. Morgan Stanley, 2019.

329737 5/22