Gen Zers may be interested in investing, but they are not interested in traditional financial planners. According to a report released by the FINRA Investor Education Foundation and the CFA Institute, Gen Zers are more likely to seek investment advice from social media, other websites, and their friends and family. Only 30% of Gen Z investors look to financial planners for investment advice. This is a concerning trend, as many young investors may end up making uninformed investment decisions without proper guidance.
The report also found that young investors have a strong preference for investing in cryptocurrencies like Bitcoin. More than half of the Gen Zers surveyed had put their money into crypto. Additionally, compared to other investment options, investing in individual stocks and index funds were less popular among young investors.
One of the reasons for this trend may be attributed to the fear of missing out or FOMO. Half of Gen Z investor survey respondents said they were driven to invest out of FOMO. This is a concerning trend as investors may end up making impulsive investment decisions based on fear rather than rational analysis.
However, financial planners may have a role to play in addressing this trend. Jack Heintzelman, a certified financial planner at Boston Wealth Strategies, believes that advisors are partly to blame for young investors’ reluctance to rely on advice from professionals. While the first instinct of Gen Zers and millennials is to look to the internet for information, there are too few financial planners on social media platforms offering sound advice.
Young investors also want planners who are comfortable and familiar with technology. This may be a challenge for older professionals who are not as tech-savvy but nevertheless need to adapt to the new generation’s preferences if they want to attract young investors to their business.
In conclusion, young investors are eager to invest but prefer seeking advice from their peers and social media. However, financial planners may need to adapt to the Gen Zers’ preferences and establish a presence on social media platforms to offer sound investment advice to young investors.
– 65% of Gen Z respondents use investing apps while 38% of Gen Xers reported doing the same.
– 24% of respondents listed advisors as one of their top three most trusted sources of investment information.
– 53% of respondents put faith in information that is relevant to them, and 52% trust advisors who share details of their own financial performance.
– Gen Z investors are eager to invest but prefer seeking advice from peers and social media over traditional financial planners.
– Financial planners need to establish a presence on social media platforms and adapt to Gen Zers’ preferences to offer sound investment advice to young investors.
– Jack Heintzelman, a certified financial planner at Boston Wealth Strategies
Written by: Kathryn Y.