If Gen Z are shamed for buying lattes, are they equipped to give advice?

Many young people echo this sentiment. When asked about why they had not yet attempted to seek financial advice, one student at University College London said they felt they did not “deserve a financial adviser”.

However, times are changing – with the average age of financial advisors reaching 57, high attrition rates in the sector and a large war for talent globally, employers are frantically chasing the optimal methods of attracting and retaining the best people. 

This has to include hiring the very sort of young people who traditionally would not seek advice.

Young people are leveraging next-gen technology to expand their capabilities. Social media such as LinkedIn and other online forums have democratised access to financial education and advice.

Young people have been at the forefront of this, with many building their own financial ed-tech companies, and garnering millions in venture capital funding.

Trendsetters

Many young people have been quick and curious to adopt new trends, such as NFTs and cryptocurrencies, while developments in financial services provision, specifically in generative AI, may well level the playing field for advisers young and old.

Financial edtechs and personal finance apps have paved the way for a new epoch of financial advice, increasing offerings for the retail investor to manage and track their spending.

For example, Canadian financial planning app Planswell has excelled in providing lots of free content and creating a blend of tech-enabled services for families, homeowners and pensioners.

Take the initiative to seek mentorship.

But despite the emergence of so-called finance super apps, a study by Hugh Kim et al indicates that increased financial literacy does not affect the quantity of financial advice, but rather the quality of expertise required to provide meaningful support.

Whereas many of the general public may have otherwise outsourced this to friends and family, the study suggested even a one standard deviation increase in financial literacy resulted in an 6.8 per cent increase in likelihood of professional support being sought.

Empathy

The structural and macroeconomic plights have made Gen-z resilient and more empathetic - key soft skills needed in the advice profession.

However, the media has largely projected a disdainful narrative of Gen Z’s lifestyle decisions, influencing both decision makers and Gen Z’s own beliefs.

According to a King’s College London study, 48 per cent of baby boomers and 43 per cent of Gen Z believe discretionary spending is a root cause of their inability to make it on the housing ladder. But is it really the Starbucks lattes that are preventing us from reaching financial freedom?

In contrast, another recent study stated that 74 per cent of millennials and 58 per cent of Gen-Z had already begun - or were in the process of - consulting a financial adviser, reporting a desire to kickstart their “investment journey” or “avoid financial difficulties”.

This opens up a new segment of the market - younger, ambitious individuals striving to overcome: low wage growth; stringent housing regulations; and education during a pandemic.

These people need financial advisers who display empathy and tolerance.

But if fear of being shamed for a Netflix subscription or the occasional barista coffee is indeed the deterrent for young people for seeking financial advice, that brings us to another question: are young people even equipped to give it in the first place?

Learning opportunities

This is where fostering great work culture with adequate training and learning opportunities comes in.

As reported by job review site Glassdoor, much of the high attrition rates at big financial advice firms were attributed to a poor work life/balance or lack of mentorship opportunities, with some reporting job satisfaction as low as 31 per cent.

A few methods to work around this include:

• Creation of structured mentorship opportunities with built-in incentives for both parties. One way this could happen is to institutionalise the learning, such as through company-wide mentorship schemes and funding qualifications for new asset classes and technology. Otherwise, young advisers can take the initiative to seek mentorship – by reaching out to interesting people on LinkedIn, networking events or colleagues you admire.
• Exposure to various client types and knowledge about asset classes through personal experience, professional qualifications, on-the-job training and personal research.
• Old is not always gold – young people bring new perspectives and may find other ways to engage with clients. Be open-minded about integrating this into an existing work culture.

Digital natives

Young people, who are often branded as 'digital natives' have widely benefitted from wielding social media platforms from a young age, making us uniquely positioned for freelance and remote work, which is characteristic of a large segment of the financial advisory and planning industry.

Mike Foy, a senior director of wealth and lending intelligence at J.D. Power, draws upon the concept of “brand evangelists”, which many content creators have leveraged to build a personal brand on social media. It is useful for talent acquisition teams to emulate such methods in order to stay top of mind for young, talented individuals looking for jobs in financial services.

One way of doing this might include hiring a social media strategist to post informative, career focused content on TikTok, LinkedIn and Instagram. Add a touch of humour and incorporate trending content (audio, challenges, influencers) to increase the chances of going viral.

Another way is to partner with organisations such as trade bodies and accrediting bodies, as well as working with university and college careers teams by hosting events and using their platform to promote various career opportunities.

Young people bring new perspectives and may find other ways to engage with clients.

This may include via mailing lists, sponsorships or brand ambassadors at places of education, who would be responsible for signposting opportunities about the career.

Budding young financial advisers can also strive for a similar approach, leveraging platforms such as LinkedIn to become thought leaders in the space, and directing online traffic to their services. Being able to resonate with and draw an audience saves the hassle of having to explain yourself when generating leads.

Other content styles include podcasts, newsletters and short form content such as reels/shorts - as long as these are in line with regulatory guidelines, of course.

Broadly speaking, very young financial advisers may well have a lot to learn - about life as well as the profession.

However, with the right attitude, an enablement with technology and a helping hand to show them the ropes, there lies an opportunity to be well remunerated in a career where one can see the positive effect they can have on a client's life.

Rengoni Bhuyan is an undergraduate