How Gen Z Can Choose the Right Financial Advisor Their Needs
Written by
Jordan Rosenfeld
Edited by
Joe Evans
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Every generation has unique financial needs based on their economic situations and life stages, making financial planning a serious struggle for many. Gen Z, approximately ages 12 to 27, spans several life stages, from the youngest who won’t be working for several more years, to the oldest who aren’t only working but may be planning families and thinking more carefully about their futures.
Gen Zers need to find financial planners who can help them think through their specific needs, which are vastly different not only from boomers, who are largely retired, but even the next generation up, millennials, who are more financially established.
Read on to find out how Gen Z can choose the right financial advisors.
Gen Z Faces Steeper Financial Burdens
In some ways, Gen Z is getting the short end of the financial stick compared to their older millennial counterparts. Gen Zers pay more for basic living expenses like housing and carry more debt, particularly credit card debt, than millennials.
They’re also still facing fallout from the economic aftermath of the pandemic, high inflation and greater student loan debt burdens if they go to college.
Financial Advisors Who Can Balance Short-Term and Long-Term Views
Gen Zers need financial advisors to help manage their financial goals, both in the long and short term. Whether it’s retirement planning and buying a house or building up emergency funds and paying down debt, a quality financial advisor can help make it happen.
Know Your Financial Advisors
It’s also important for Gen Zers to know the difference between types of financial advisors. For instance, work with a certified public accountant to help with budgeting and tax prep basics and a certified financial planner after you’re more financially stable.
Here are a few different types:
- Certified public accountant (CPA): These financial pros largely focus on tax planning, but they can also teach basic skills like budgeting, money management and best practices for avoiding audits.
- Certified financial planner (CFP): These professionals must meet the Certified Financial Planner Board of Standards guidelines. They can advise on saving, investing, estate planning and financial strategy.
- Personal financial specialist: These professionals must meet the American Institute of CPAs or AICPA guidelines. They tend to focus on investing, income tax planning, retirement and risk management.
- Chartered financial analyst: These professionals obtain a special designation from the CFA Institute. They often work for corporations around investments and stocks. Gen Zers may want to hire one if you need help selecting stocks to invest in.
Seek an Advisor Who Understands Digital Consumerism
Gen Zers need to find a financial advisor who understands the unique economic and cultural factors that shape their spending, as well.
One financial advisor, Charlotte Guinot, of McLoughlin Financial, LLC, previously told GOBankingRates that Gen Zers face a lot of pressure to buy largely because they spend so much time online, and because digital payments have become even easier to do.
“It’s simply easier to spend money today than ever before. The added demand and pressure Gen Z has to keep up with their peers on social media does not help their spending habits,” she said.
Pick Advisors Who Can Deliver Personalized and Values-Driven Services
Gen Zers already prefer banking experiences with personal touches, so they’re likely seeking a financial advisor who can give them focused attention that fits who they are as individuals.
As Stoy Hall, certified financial planner and CEO of Black Mammoth, told GOBankingRates previously, “Gen Z is highly value-driven.”
He said they prefer institutions and people “that reflect their ethical and social values, such as those committed to environmental sustainability or social justice causes.”
Gen Z will need to be able to vet their financial advisor — likely opting for those whose bios and mission statement are visible on a website or LinkedIn page.
Other Considerations
Financial advisors have different fee structures-from hourly fees that range on average from $120 to $300, to flat fee packages.
Since most Gen Zers are still trying to save money, shop around to find someone who meets your other needs but doesn’t charge more than you can afford.
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