Meet Generation Z—An Entirely Different Investor from Earlier Generations

The Business Challenge

In 2018, advisors were grappling with a new generation of potential investors coming of age. Generation Z, said to be born between 1995 and 2010, was a group that was not yet well understood. But, as they began graduating from college and entering the workforce, they were making clear their differences from the preceding three generations—traditionalists, boomers, and Generation X. That suggested to advisors they'd be a more challenging group of investors to serve.

Growing up during the height of the Great Recession, Gen Z witnessed their mostly Gen X parents lose 40% of their net worth. Watching their 'older sibling' Millennials struggle to get their financial footing after the Great Recession as their parents battled to recoup their economic losses made this generation value financial stability over all else, researchers found.

These highly educated digital natives grew up fighting for climate change and social justice, and expecting corporate and government accountability. They are wary, fiscally frugal, and privacy oriented. With same generation heroes like Greta Thunberg, Brea Baker, and David Hogg, this most diverse generation in American history would challenge the status quo, and that included in wealth management services.

To engage "Generation ESG", this ESG-focused sustainable investment fund client, which is part of a bank that's a wealth and asset manager, wanted to educate its advisors on how to adjust their thinking and practices to meet Gen Z's needs. It helps that the bank's values align with Generation Z's. It has no recent history of financial scandals or discrimination controversies, and it's ranked as a trusted financial institution and top employer because of its authentic commitment to diversity, equity and inclusion.

The Solution

This client determined a position paper that would provide its advisors with a thorough overview of who Gen Z is and how best to serve them was its strongest option. The bank agreed a problem-solution position paper that shared the best research available at the time about this generation was ideal for this purpose.

The position paper educated advisors about the challenges and opportunities of getting to know this generation and of customizing services to them. But it also conveyed how imperative this was, since in 2018, there was an expected of wealth transfer of $30 trillion from baby boomers coming to younger generations in the next two decades, which would include Generation Z. Thus, advisors, the average age of whom is 55, needed to win the trust of those in Gen Z whose parents and grandparents already are their clients. That way, they'd stay with the advisory firm after those older generation relatives, from whom they'd inherit wealth, are gone.

That made a position paper that was a client retention tool for advisors necessary, because it helped them realize the need to develop whole family wealth management strategies. By providing them the latest information on their clients, the position paper showed readers how committed the bank is to helping them build their business and service investors.

It suggested offering Gen Z the bank's fund, an investment product that aligned with Gen Z's core values, also might be beneficial to advisory firms. The principles around which the bank constructs its ESG-focused sustainable investment fund also is consistent with the institution's corporate policies. That's appealing to Generation Z.

Educating advisors on the support they could get from the bank to help sell the product was one goal. But, the client also wanted a position paper that showed advisors how to emphasize with their clients the bank's commitment to offering sustainable investment products made by investors for investors.

The Project Approach

I began by providing the senior executive I worked with on the project an outline. It included citations to primarily articles from financial media, like those linked above, since there weren't relevant scholarly journal articles available on Gen Z's investment needs. We identified some SEO keywords but, at my suggestion, we took a semantic SEO approach, which prioritizes meaning and subject matter depth over single words or phrases.

As is my standard practice, I organized the position paper so the client could turn each subheading and its content into blog posts written to promote the position paper and the bank's understanding of their advisors and the advisor's investor clients. I helped them identify content that might get turned into presentations, a webinar, or videos by a senior executive responsible for client development.

Those elements could get used for position paper promotion on the bank's portal where advisors went to find educational, in their advisor newsletter, and off their site on relevant digital platforms targeting advisors.

The Intended Outcome

With some thought and research, the position paper achieved the client's aims, while satisfying legal compliance requirements. It helped advisors gain the knowledge necessary to build key aspects of their practices around this new generation of investors.

The bank understood that by helping advisors recognize this generation will reshape the way wealth management services get delivered, they could incorporate knowledge about Gen Z into their investor education and business development activities. The position paper also showed the fund's advisors the bank would provide content that helps them with client retention.

The client invested in the position paper to build trust with its investment advisor clients. But, it had the dual purpose of providing methods for those investment advisors to build trust with their investor clients.

The bank's advisor portal also allowed advisors who were not bank clients to get access to advisor-specific content by creating an account. So, those advisors could see the position paper and related content provided by the bank. That meant they might become advisors offering the bank's fund it to their investors.

Work With Me

If you'd like to discuss a similar project for your financial institution, I offer a complimentary 30-minute introductory phone call to discuss your needs. Learn about that by reviewing my collaborative process.

After you do, contact me to set up a time to share more details about your needs.

(c) 2023-2024. Dahna M. Chandler for The Financial Communicator, a division of Thrive Media Collaborative, Inc. All rights reserved. This case story may not be reproduced or reposted in whole or in part, including for LLMs, without express written permission of the author.

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