Sales & Marketing | 08.05.26
Younger Investors Keen On Financial Advice — But Expect Dynamic, Transparent Approach
by: Rich Blake
It seems the business suit is making a comeback.
Look no further than the recent turnaround of Tailored Brands, parent company of Men’s Warehouse. A few years back, it filed for bankruptcy. This past summer, the company sought regulatory permission to go public.
For financial advisory professionals, outward appearances still matter enormously — for better or worse.
“I’ve been in situations in which younger consumers in their twenties did not respond well at all to the guy in the suit and tie,” said one thirty-something wealth management advisor based in Upstate New York. “And that’s especially true when someone’s touting a product. Younger prospects tend to instinctively throw up their guard because they feel like they are being sold to.”
It’s not necessarily the formal attire that’s potentially hampering interactions. Inter-generational chasms aren’t always to blame, either. (After all, vinyl records made a comeback, didn’t they?)
What many younger clients most crave? Sounding boards and fresh perspectives, said the Upstate New York advisor, who works at an insurance firm.
“Gen Z wants a listening ear,” he added.
Demand for Advice Still Robust
Taken together, Gen Z and Millennial investors represent a massive reservoir of demand driving the marketplace for financial advice. These demographic groups are poised to inherit $60 billion, according to the CFA Institute. But these younger cohorts just do things differently. Because of this, the advice business has splintered into a maze of different delivery sources, from apps and AI Agents to family friends who also happen to be old-school CFPs (and who may still wear a jacket and tie every day).
An industry survey conducted by the CFA Institute found that nine out of 10 wealthy Gen Z/Millennials currently use some form of paid financial advice, including traditional advisors, robo-advisors, accountants and lawyers. Nearly 70% of young investors surveyed (and who engage a paid adviser) interact with their adviser at least monthly, according to the CFAI survey.
Looking at Gen Z, the group born between 1997 and 2012, it’s clear that fewer of them are using traditional providers. Instead, their advice comes from a variety of non-traditional sources in large part found online or via social media platforms. This youth cohort has been broadly brushed as distrustful of a Wall Street system which in their eyes has outlived its usefulness relative to cryptocurrencies, meme stock trading and prediction markets.
Only about one in four Gen Z members rely on financial institutions for guidance on basic offerings such as asset allocation recommendations and fund selection, according to a study by McKinsey.
Growing up with iPhones gave today’s teenagers and twentysomethings a kind of digital fluency that permeates nearly every daily task. They expect immediacy. And crystal clarity. Remember, they can easily tap chatbots to make it all make sense.
Show Me the Added Value
McKinsey set out to research what younger financial services consumers truly desire from a wealth advisor. Confidence can be earned, the consulting firm concluded, three main ways: transparency, explainability and consistency. The core dynamic in advisor-client relationships has morphed from the sell-side declaring “trust me” to the buy-side insisting “show me.”
Younger clients will turn to personal (trusted) networks, influencers, algorithms and AI models to make their assessments (and not your grandfather’s slide deck) while expecting all kinds of modern bells and whistles; i.e. blockchain-verified transactions involving secure digital identities. The kids today want wallets for their crypto, not passbook savings accounts.
However, macro trends are moving in an encouraging direction, “solidifying the evolution of advisors from financial planner to life coach,” McKinsey said.
Younger clients are often driven by “fear of missing out,” or “FOMO.” And some tend to seek advisors who can contextualize new developments in the market. (Take, for instance, the juggernaut of AI infrastructure spending which has driven some divergent market moves; i.e. Microsoft’s bets have paid off while Meta’s has not.) What the young folks truly want, said the CFAI, is a “strategic, forward-looking partner, balancing innovation with prudent advice.”
Saving for a first house, starting a family, tuition nest eggs, life insurance — wow, a lot of big changes are coming quick for the eldest Gen Z members set to turn 30; trusted advisors can add value by taking emotionally charged decisions and addressing them with data-driven propositions that can be cross-referenced with a click.
“Young investors learn from a wide range of online sources and about one-third have used generative AI for financial education,” the CFAI said. “Yet human advisers remain the single-most-trusted source of investment guidance.”
Millennials are the most likely to access a paid professional adviser through an investment firm, wealth manager or family office. Millennials also show strong appetite for advisory services across both human and robo-advisory formats.
Gen Z members are more likely to access robo-investment advice.
Some Old School Observations
A sixty-something financial advisor from a big bank (and who asked for anonymity) had this to say about the youth of today: “I have been in wealth management since before the crash of 1987 and in my experience young people prefer to do things themselves. With AI and Robinhood it’s all very easy. They are also extremely cost conscience and realize pretty quickly that they might be better off using non-fee based and/or heavy-commission based advisors.”
A recently retired veteran wealth advisor with 50 years in the business concurred with this assessment. He added that, toward the end of his career, he did start noticing his young clients had gradually become more inclined to “using a more hybrid model.”
Another SVP from UBS: "I think it really depends on the amount of the assets. Large sums of money/high net worth/inherited assets will always need a solid advisory plan from a professional seasoned advisor. But I am also seeing Gen Z investors using social media, AI and zero commission trading apps. However, as they get older, I believe they will need a fee based advisory plan. They will not have the time to trade crypto and tech on their phones.”
He added: “I really think there is a hybrid approach going on."
The wealth advisory professional from Upstate New York went on to explain that younger clients are drawn to digital advice because it’s responsive, unlimited and “often times delivered directly to them in their social media algorithm if they have a natural inclination towards bolstering their financial education.”
But, he added, many younger people are struggling to save for big goals, such as saving for a home or a wedding. Many specifically want to do things without any help from their parents.
Advisors would do well to approach youthful prospects from the standpoint of focusing on personal relationships in the context of helping them leverage their goals to better their situations. It’s true many young people are drawn towards the instant gratification that day trading provides. But people do tend to change, especially as they get older.
The advisors who are winning younger clients, industry professionals agree, are the ones presenting themselves as a resource — more casually.