It can be said that every generation finds ways to march to the beats of their own drummers, but when it comes to financial matters, millennials and Gen Z truly are doing things their way. For advisors, that’s not something to fight, but it is something to embrace.
Consider the findings in a new survey from U.S. Bank, which actually dispels some of the preconceived notions about these two major younger demographics. Relevant to advisors is that despite previous arguments to the contrary, there are ample signs that younger investors and workers want, or even need to work with advisors because they’ve not forsaken “traditional” financial goals such as home ownership and retirement planning.
“The survey found that Gen Z and Millennials continue to value long-term goals such as home ownership and having enough money to retire comfortably,” according to U.S. Bank. “Yet they are also more likely to say they have given up on owning a home for financial reasons and that significant debt has impacted their plans, prompting many to seek alternative paths to building wealth. Increasingly, families are helping support major financial milestones.”
Adopting, Not Abandoning
There’s plenty of criticism – some of it accurate, some of it misplaced – regarding how younger people pursue financial goals. Advisors would do well to not add to this derision. Rather, they can enhance connectivity with younger clients and prospects by realizing that a 35-year-old today likely wants to check the same financial boxes their parents did, but the road traveled is going to be different.
"Many younger Americans aren't abandoning traditional financial goals – they're adapting how they pursue them," said Scott Ford, president of U.S. Bank Wealth Management. "They're starting earlier, actively seeking information and exploring multiple ways to build wealth, with families increasingly providing support for major financial milestones along the way."
Something else for advisors to consider: Financial goals for women are increasingly on the minds of today’s younger clients. That’s great news for the wealth management industry because when it comes to achieving their financial goals, younger women are engaged and put premiums on professional, trustworthy advice.
“Women continue to face different realities than men when it comes to building wealth. Their plans are more likely to be disrupted by debt or life changes than men’s, and they’re more likely than men to say they’ve given up on at least one goal for financial reasons,” adds U.S. Bank.
Financial Goals for Women: Break the Barriers
When it comes to financial goals for women, advisors should note the current state of play is a good news/bad news scenario. Let’s get the bad news out of the way so we can finish on an upbeat note.
As noted above, some women have already abandoned a financial goal. Sixty-one percent believe they aren’t making enough money to get to where they want to be, financially speaking. However, more women than men are open to professional guidance – a logical step considering many are already leaning on family for wealth-building advice.
“At the same time, younger women are entering the financial system with greater exposure to family members actively building wealth than previous generations,” concludes U.S. Bank. “Nearly one-third of Gen Z women (31%) felt prepared to make informed financial decisions when they started building wealth (vs. 25% of Millennial women and 20% of Gen X women), and 72% say they grew up watching family members actively build wealth (vs. 63% of Millennial women and 56% of Gen X women).”
