Study: Nearly 66% Of Gen Z Workers Say They Need A Financial Advisor

Over the years, U.S. employees have entered the workforce or hit their career earnings peak under widely different circumstances. Their experiences during this time have had a profound impact on various aspects of their lives.

A recent webinar by the Employee Benefit Research Institute (EBRI) featured a panel of industry experts who provided attendees with a comparison of the financial status of baby boom, Gen X, and millennial families.

A Look At Gen Z

During his remarks, Drew Kettering, head of digital solutions, Retirement Plan Services, Charles Schwab, highlighted some of the findings from the 2021 401(k) Participant Study—Gen Z Focus.

Stress about their finances has had an outsized impact on the ability of Gen Z and millennials to do their jobs during the pandemic, he said.

About one-third of younger participants in 401(k) plans predicted that their retirement will be delayed because of the pandemic. At the same time, about one quarter of Gen Z workers and one-third of Millennials said that their loyalty to their employers has increased because of how the employers managed the pandemic.

When it comes to getting financial advice, almost two-thirds of Gen Z said that their financial situation warrants advice from a professional. And compared to older Americans, they are more willing to follow computer-generated advice, as well as advice from humans, Kettering said.

For their part, Gen Z workers want help in managing their financial lives today so that they can save more money for their retirement. About half of Gen Z participants also welcome online-assessment tools that can give them an overall financial picture and an action plan.

Looking ahead to a post-pandemic world, Gen Z is more optimistic than other generations about adopting positive financial behaviors. And going forward, top behaviors for Gen Z will more likely include saving more in general, paying off debt, increasing 401(k) contributions, investing more outside their 401(k), and re-balancing their 401(k) plans, Kettering said.

Gen Z is also less optimistic about reaching their retirement goals than other groups. In naming their retirement income sources, 36% named their 401(k) plans, 14% their savings and investments, and only 7% named Social Security benefits. More Gen Z participants feel that they are not on top of their 401(k)s and agreed that they do not know what investments to select for their 401(k) plans.

With regard to their 401(k) plan behaviors, their investments wish list includes annuities that offer guaranteed income after they retire, environmental/social/governance (ESGs) or socially responsible investments (SRIs). Their “must-have” benefits to consider when looking for a new job include emergency savings accounts, tuition reimbursement while employed by their company, and financial-wellness programs.

Work/Life Balance

In his presentation, Rodney Bolden, field engagement specialist, financial wellness, Morgan Stanley, told attendees that workers want work/life balance, as well as financial-wellness benefits that are in line with their needs.

He also shared results from a Morgan Stanley at Work and SHRM survey, which reported that Americans are experiencing a high level of finance-related anxiety or depression during COVID.

In fact, 31% of working Americans said that they are experiencing finance-related anxiety or depression, and women are more likely than men to report feelings of depression and anxiety. Forty-nine percent of Gen Z reported anxiety, 31% of millennials reported anxiety, 28% of Gen-Xers reported anxiety, while only 27% of baby boomers reported anxiety.

Not surprisingly, baby boomers are the most likely of the groups to feel financially confident and on track to meet their goals. Eighty-four percent of them said that they are confident in their ability to make financial decisions, and 63% are confident in their financial knowledge.

Personalized financial-wellness benefits are also sought after by many Americans. Fifty-one percent want financial education, 54% want financial coaching, and 60% want financial planning.

Dealing With The Great Resignation

Bolden also addressed a topic that is of concern to many employers—The Great Resignation. Over 40% of U.S. workers are looking for a job right now or are planning to do so soon, he said. As they look for new jobs, many workers want personalized, financial-education benefits.

In spite of this widespread demand for new jobs, few organizations are meeting their workers’ needs. For employers wishing to get, retain and motivate a healthy and productive work-force by focusing on benefits that support not just their own employees, but their potential talent pool as well, Bolden shared the following checklist:

1. Assess your situation.
2. Adopt a strategy.
3. Develop a plan.
4. Personalize—This is not a one-size-fits-all program, he said
5. Communicate.
6. Review—Review and evaluate your program on an on-going basis and celebrate your successes, he said.

The panel also included Craig Copeland, senior research associate with EBRI. Serving as guest moderator of the discussion was Jason Jagatic, head of global and workplace thought leadership, Fidelity Investments.

Ayo Mseka has more than 30 years of experience reporting on the financial-services industry. She formerly served as Editor-In-Chief of NAIFA’s Advisor Today magazine. Contact her at [email protected].