It’s official. Generation Z is a generation of entrepreneurs. We could be on the verge of revolutionizing wealth management as new technologies help eliminate barriers for young investors at an unprecedented pace.
According to Charles Schwab’s 2024 Financial Today Survey, Generation Z adults are starting to invest and save at an average age of 19. That’s younger than even baby boomers (who started investing at an average age of 35) and millennials (who started investing at an average age of 25).
The impact of this early start cannot be overstated. Not only are Gen Z adults an average of six years ahead of millennials when it comes to investing, it also means they’ll start their financial education earlier.
At the forefront of Generation Z’s investment frenzy is technology that makes financial calculations easier. In an industry that is slowly moving away from its reliance on modern technology, the advent of digital transformation will level the playing field for wealth management.
With that in mind, here are four technology changes that are increasing Generation Z’s engagement and willingness to invest:
Unprecedented comfort
One of the driving forces behind the marketing frenzy of Generation Z is the explosion in financial management available to today’s marketers. The digital management market in Europe is expected to reach €3.5 trillion by 2028, growing at a CAGR of 23.4% over the next four years.
The growth of platforms, apps and open banking fintech promises to make wealth management more accessible and accessible to young investors than ever before.
A full-featured user interface means Gen Z investors don’t have to deal with lengthy paperwork and phone calls to fund managers like their older counterparts, while smart Fintech platforms like Joint Venture are helping to make it possible for anyone to budget their monthly income.
The Fintech revolution has reduced investment from retail investors, which has benefited Gen Z, who know the benefits of investing early but struggle to make the time to learn how to invest in any meaningful way at a learning age. the ins and outs of this business.
The Age of Financial Literacy
Gen Z is the first truly connected generation, paving the way for unprecedented access to financial literacy tools.
Social media platforms like TikTok have given rise to “financial influencers,” financial education funds that are helping to take investment awareness among young people to the next level.
The richest person in the world today is Humphrey Yang, who has contributed 54,317,401 likes, likes, and user products on the platform as of this writing. Yang, whose account has 49.5 million likes on TikTok, offers a variety of savings, tax credits, and personal finance tips to help improve his followers’ financial literacy.
When used correctly, social media can be an important tool for understanding the intricacies of investing and helping young investors better understand things like the impact of their ideas, their range of business options, as well as tax issues such as the current level of capital gains tax. £6,000 in the 2024/2025 tax year.
While increasing financial literacy on social media has led to many young investors getting a head start on their investment journey, there are concerns that inaccurate ratings could impact Gen Z investors and their finances.
According to a 2024 survey, 29% of 18-24 year-olds wanted to invest in meme products. This number is almost double among respondents aged 25-44.
However, Gen Z does not seem to be largely affected by misinformation on social media; The 65 percent of respondents in Schwab’s survey calling for more media has no impact on their resources, and 57 percent of respondents said they are more likely to work with a financial advisor, suggesting that young investors are aware of the advice they get online.
Harnessing the power of information
The result of open banking is helping investors share information across trusted third parties, enabling unprecedented levels of personalization and innovation.
According to EY, more consumers are willing to share personal information with asset managers rather than healthcare providers if they receive more relevant services and experiences. To quantify this, 72% of consumers are willing to share their financial goals and intentions as part of their investment strategy. And more than half easily share their goals and objectives, which is important for enabling more programs and collaboration.
With advances in AI and machine learning, open banking platforms can increase the value of information sharing, providing detailed insight into spending and generating investment recommendations based on each user’s behavior.
Embracing Passivity
More and more Gen Z entrepreneurs are taking advantage of passive marketing thanks to the fintech services that are integrated here.
There are a number of different apps in the UK and US that work by reducing the cost of card and online purchases to the nearest figure and adding them to a different savings (usually savings) average.
This will help more young investors save leanly and at a pace that will help them live well.
These strategies are helping Gen Z investors to be more profitable than their older counterparts. In fact, data from Shepherd’sFriendly shows that Gen Z save around £100 more a month than Gen X, saving an average of £410, while those aged 45 to 54 save an average of £310.
The future of wealth
As Gen Z investors start their investment journey earlier, there are signs that men and women are improving their financial literacy and investment knowledge. the importance of creating wealth.
The development of Fintech and easy access to services that have been difficult to access due to poor returns in the past could help support more investment projects for Gen Z and the next generation.
With increased financial literacy and personal power through Open Banking, the future is brighter for wealth management and young investors who are moving fast to create the future.
