The financial advice industry continues to gray, and many advisors are expected to leave the industry in the coming decade. Cerulli Associates has estimated that advisors coming into the industry barely offset retirements and industry exits despite the growing need for financial advice. This looming gap presents an urgent need for fresh talent, and Generation Z is poised to fill it. Generation Z brings invaluable perspectives and talents to the table. By recognizing and embracing the unique dynamics of Gen Z in financial planning or advice, broker-dealers can create environments that nurture their growth, innovation, and success.
It’s Time To Dispel Common Misperceptions
Gen Z is often unfairly reduced to simplistic tropes, ignoring the diversity and complexity within this demographic born between 1997 and 2012. These myths can undermine their potential and the benefits they can bring to financial planning and wealth management.
Myth 1: They’re Not Adults
Gen Z is young, but the oldest of the cohort are in their mid-20s and actively entering the workforce. They bring fresh perspectives and are eager to learn what’s necessary for providing holistic financial advice. They are accustomed to conducting research online and evaluating different tools and resources for problem-solving. Their youth is not a detriment but an asset, providing new insights into financial planning.
Myth 2: Gen Z Doesn’t Know How To Manage Money
Despite being young, Gen Z is tech-savvy and can quickly scale the learning curve on personal finance, utilizing readily available apps and digital tools. Their tech prowess is a great fit for companies that are investing in platforms and making advisors’ lives easier with best-in-class support. They've been educated on understanding and managing personal finances since middle and high school, not just college, which sets them apart from previous generations. This generation's experience and comfort with technology can streamline financial processes and enhance client experiences.
Myth 3: Gen Z Has A Difficult Time Adjusting To The Workplace
Gen Z is eager to work, but on their terms, valuing a good balance between their professional and personal lives. They are also resilient and adaptable, as evidenced by their adjustments during the pandemic. While they are digital natives, that does not mean they do not have the necessary skills for effective interpersonal engagement. In fact, according to the National Society of High School Scholars (NSHSS) in 2022, Gen Z is “tired” of remote work and prefers in-person environments where they gain hands-on experience, a preference that aligns well with the demands of financial advice. Companies that offer opportunities for them to join tenured teams where they can be in an office, learn from experienced advisors, and actively contribute with their technology skills and abilities is a win for them.
Firms Must Set Gen Z Up For Success
Understanding the motivations and preferences of Gen Z is crucial for creating an inclusive and productive work environment that offers the resources they need to develop their talent and stay in financial advice careers. What this generation seeks to achieve is purpose-driven paychecks: Gen Z values meaningful work that resonates with their beliefs and passions. Conveying to Gen Z advisors that their career success means lifting others and helping people at critical life moments can go a long way to attracting and retaining talent. The alignment of personal values with professional responsibilities is key to engaging this generation.
Senior executives should build supportive environments where young advisors can learn from and lean on others. Where they are offered opportunities for mentorship, joint work, and participation on teams. Local support from firm leaders and colleagues fosters a sense of belonging and empowerment for Gen Z while helping them build the skills to be successful. At my firm, cultivating a supportive culture through approaches such as teaming and providing access to leads early on in their practice has encouraged collaboration and innovation that has transformed the way Gen Z advisors build their book of business.
Professional Growth Opportunities
Gen Z is eager to learn and grow professionally. Providing avenues for skills development and career advancement is essential for retaining top talent and fostering a culture of continuous improvement. Opportunities supporting achieving industry designations, advanced markets training, and career progression will ensure that Gen Z advisors remain engaged and committed to their roles while also achieving their long-term vision and goals.
With a staggering 106,264 advisors—nearly 37% of the industry total—expected to depart in the next decade, our outreach to the next generation is more crucial than ever, and the time to act is now. By dispelling myths and understanding the unique qualities of Gen Z, the financial planning industry can tap into a wealth of potential that will drive its future success. Embracing Gen Z is not just a necessity but an opportunity to innovate and thrive in a rapidly evolving landscape, where clients are getting younger and in need of advisors of their peer or age group who meet them where they are.
Patrick Hynes is head of field sales for Prudential Advisors and leads strategy for a group that includes roughly 3,000 financial professionals.