Financial planning for Gen Z clients

Key takeaways:

• Gen Z is currently the youngest adult generation, and they’ve grown up with technology. 
• They have fears about inflation and cost of living, just like older generations. 
• This generation may be more socially conscious when it comes to investing and prefer to work with financial professionals who have knowledge of or utilize AI in their practice. 

01/27/2025 — Generation Z, born between 1997 and 2012, is often seen as the tech-savvy, trend-conscious younger sibling of Millennials. While they might be a long way from retirement, this demographic brings unique challenges and opportunities for financial professionals looking to offer guidance. By understanding Gen Z’s financial habits and preferences, and how their views towards finances differ from the older generations you frequently work with, you can establish trust, build long-term relationships, and guide them toward financial success. 

How does Gen Z differ from older generations?

According to Nationwide’s tenth annual Advisor Authority survey, just being able to retire is a concern for Gen Z investors, with 14% saying that they do not expect to retire at all. This percentage was somewhat higher than non-retired members of other generations and shows that Gen Z could use some financial guidance when it comes to retirement. They also differed from non-retired members of older generations when it came to long-term challenges they are facing, like housing prices and mortgage rates, mismanagement of finances in the great wealth transfer, or widespread job losses due to AI. 

But it’s not only differences between the generations. Gen Z, Millennials, Gen X, and Boomers also have some things in common. The Advisor Authority survey found that Gen Z, like non-retired members of the older generations, were most concerned about inflation (40% of Gen Z, 38% of Millennials, 40% of Gen X, and 43% of Boomers) being the biggest challenge to their retirement, followed by increased cost of living (34% of Gen Z, 34% of Millennials, 40% of Gen X and 46% of Boomers).

Gen Z and the rise of online misinformation

Gen Z grew up with the rise in online (dis)information and therefore are navigating the financial advice they find on the internet differently than older investors. According to the 9th annual Advisor Authority study, Nationwide found that 42% of Gen Z investors and 38% of Millennial investors are accessing financial information, guidance and advice through social media, by far the most of any generation (vs. 16% of Gen X and 5% of Baby Boomers).¹ This means that Gen Z may turn to their favorite “finfluencers” for advice on social media, rather than engaging with a real life financial professional. 

Gen Z is an untapped market

Nationwide found that 67% of Gen Z investors do not currently pay to work with a financial professional. Although this isn’t too surprising, considering Gen Zers can be as young as 18 and may not have even considered their financial plan yet, this is a huge opportunity to respond to their distinctive needs as they come of age and look for financial guidance. And Gen Z are choosing who they work with differently than older generations as well. A large split from older generations, 26% of Gen Z said a financial professional familiar with “socially responsible investing” would make them more likely to work with them/influenced them to work with their financial professional (vs. 15% of Millennials, 8% of Gen X, and 5% of Boomers). 

Gen Z and Millennials (both 14%) found it influential that a financial professional uses or has knowledge of AI, at least somewhat more than older generations (11% Gen X, 6% Boomers). There are ways to integrate AI into your practice that can help attract younger clients while also potentially improving the efficiency of your business. It’s a win-win. 

Financial literacy tips for Gen Z

It’s common knowledge that adults begin with lower financial literacy, and it increases over time.² So how can you help your Gen Z clients build financial security and increase financial literacy?

Provide the basics

Moreso than with older clients, you may need to start with the basics. You can help them build financial security by teaching fundamentals like budgeting, compound interest, debt management, and building an emergency fund.

Utilize financial tools and AI

You can harness the power of AI or other cutting edge digital tools in your practice to enhance operations, analyze trends, or open new avenues for creative solutions, all while providing better business services and attracting younger clients.

Gamify financial planning

Gamification may resonate with younger clients and makes learning fun. Tools like budgeting apps that reward saving milestones or quizzes on investment knowledge can boost engagement.

Encourage credible online resources

Knowing that Gen Zers are likely to source financial information on their own, you can introduce them to credible online resources. Empower your Gen Z clients to be more discerning with online financial advice, while reminding them you’re available for personalized.

Address real-life scenarios

Using real-life examples can help explain financial concepts. For example, you can utilize forecasting tools to show clients about how much money they’ll need to retire, or how compound interest can be a powerful strategy when investing, especially as a young person.

Gen Z are concerned politics could affect their portfolios

Gen Zers are also concerned about politics. More than three in five (62%) of Gen Z investors, at least somewhat more than any other generation (50% of Millennials, 52% of Gen X, and 57% of Boomers), felt that the results of the 2024 federal elections (both president and congress) would have a bigger impact on their retirement plans and portfolio more than market performance. It’s natural for investors of all ages to be concerned that when a particular party takes office, their finances could suffer. It can help to remind them to keep perspective on the long-term. You can assure your Gen Z clients that when it comes to long-term investing outcomes and the markets, it doesn’t really matter which party has power.

Help Gen Z achieve financial stability

If you’re looking to grow your expertise in guiding the next generation of investors, start building your strategy today by catering to the unique needs of Gen Z and positioning yourself as a key player in their financial success. While they may have similar concerns about inflation and cost-of-living compared to older generations (who isn’t concerned about those things?) Gen Zers are moving through a much different world than their parents and grandparents did at their age. By prioritizing transparency and socially conscious investing, leveraging digital tools like AI, and tailoring investments to their preferences and values, you can play an important role in Gen Z’s financial future.