A New Wave of Investors Is Here: Meet Gen Z

By Amy Webber, CEO, Cambridge Investment Group Sponsored By Cambridge Investment Research, Inc.

Baby Boomers, Gen X, Millennials, and now ... Gen Z. All four of these generations are defined by their unique preferences and expectations — outlooks on life that are often shaped by the social and environmental conditions they grew up in. These preferences and expectations often have a major influence on how financial professionals serve each of their clients. How could they not? Older generations of investors, for example, still typically prefer to meet in person, while younger generations tend to gravitate toward virtual meetings and instant messaging applications. A prudent financial professional understands that a “one-size fits all” approach to wealth planning isn’t sufficient.

Gen Z, defined as individuals born between 1997-2012, is the latest generation to enter the investing arena, with Generation Alpha not far behind. What defines Gen Z perhaps more than any previous generation is its appetite for technology. Many Gen Zers grew up during one of the most exciting stretches in tech that we’ve ever seen, highlighted by the release of the iPhone in 2007, when the oldest Gen Zers were barely 10 years-old. By the time most Gen Zers hit their teenage years, mobile devices, WiFi, social media, and on- demand entertainment were a major part of everyday life.

Why should any of this matter to financial professionals? Influenced by the environment they were raised in, younger generations expect a fast and high-quality tech experience in all areas of their life, including financial planning. And as these investors continue to build and inherit wealth, start families, and make important financial decisions, it is vital that financial professionals make them a priority.

Let’s go over a few of the best ways you can appeal to the younger generations of investors.

Build a Digital Reputation

Younger generations are accustomed to using technology, and they want to work with financial professionals who can provide an overall experience that meets their expectations. The good news is that there are a variety of ways you can leverage the digital platforms that move the needle with younger generations. Examples include enhancing your online presence through social media content, developing a user-friendly and interactive website, and possibly even building a dedicated mobile app. The possibilities are nearly endless in today’s digital world, and many financial solutions firms even provide services to support financial professionals in these areas.

You can elevate your digital reputation even further by engaging with potential clients through educational content, webinars, and interactive tools. All of these methods help demonstrate your understanding and command of today’s technology while building trust with your target audiences.

Tap Into Technology

Demonstrating that you know how to use technology is the first step to attracting younger generations of investors, but proving that there’s more than meets the eye demands an even more focused approach.

AI, machine learning, data driven insights, and other automated solutions can completely revolutionize how you do business, allowing you to get more done in less time and with fewer resources.

Finding ways to implement AI is a great place to get started — 60% financial professionals in one report1 have expressed interest in leveraging AI to execute administrative tasks, assist with client interactions (e.g. scheduling and routine questions), research investment opportunities, anticipate needs, write emails and blog posts, and provide a generally more personalized experience across the board. Automated scheduling and support tend to appeal to younger clients who value efficiency and convenience, and data- driven insights can help you make informed decisions and optimize portfolio performance.

The important point to remember here is that technology should be used to compliment, not replace, your services. With great power comes great responsibility. Applied correctly, these technologies can be used to enhance your services while opening up more time to spend with clients. Technology has provided the opportunity to do business smarter and faster, and financial professionals who don’t embrace these capabilities risk being left behind.

Recruit Tech-Savvy Financial Professionals and Associates

Yet another way you can resonate with younger clients is to hire financial professionals and associates who are proficient with today’s technology platforms. This approach taps into the power of relatability, shared experiences, and cultural understanding, which are important elements in establishing trust and rapport with clients, especially among younger generations.

Accomplishing this rapport starts with expanding traditional recruitment routes. In a service-focused industry, it’s not just about what (or who) you know, but perhaps more importantly, what you have to offer. It’s great to have new candidates with a background in finance or business, but soft skills such as communication, critical thinking, and the ability to work with teams are becoming increasingly important and valued not only within the industry, but for those the industry will be serving. This means recruiting from outside traditional education fields, and widening your recruiting net. A great place to start is sourcing talent from higher education institutions of all types, including women’s colleges, HBCUs, and alternative educational programs.

To summarize, financial professionals have a significant opportunity to attract and serve younger clients in today’s tech-driven world. By understanding the unique needs and preferences of this demographic and tailoring strategies accordingly, you can build long-lasting relationships and position yourself for long-term success.