Journal of Financial Planning: May 2021
Generation Z, those born between 1995 and 2010, are the largest, most diverse cohort yet. According to a report from Catalyst, the digital natives care about diversity and the environment, and a majority support same-sex marriage.
Gen Z is now entering the workforce in higher numbers. What does Gen Z look like as future planners and clients?
As employees. Catalyst reported that Gen Zers will be loyal to organizations with a positive workplace culture. They are attracted by workplaces that pay well, have flexible schedules, and offer continuing education opportunities. Deloitte reports that Gen Z is motivated by job security and interesting work.
“While salary is the most important factor in deciding on a job, Generation Z values salary less than every other generation: If given the choice of accepting a better-paying but boring job versus work that was more interesting but didn’t pay as well, Gen Z was fairly evenly split over the choice,” the Deloitte report read.
Areas to focus on: Focus on inclusive leadership—diversity, equity, and inclusion policies—sustainability practices, continuing education opportunities, and robust benefits packages.
As clients. CNBC reported that Gen Z was hit hard by the pandemic. About 46 percent of Gen Z has financial help with their housing costs right now, and 29 percent have help with buying groceries, according to Nerdwallet.
CNBC reported, however, that 16 percent of Gen Z starting saving more during this past year. Plansponsor reports that 12 percent of Gen Z workers started saving for retirement already and 35 percent plan to start saving in their 20s.
“I’m building my safety net. Who knows what’s next? I’m also paying down the principal on my student loans,” 23-year-old Robert Scanlon told CNBC in an article “Amid Coronavirus Changes, Some Millennials and Gen Z Stumble into Saving.”
Nerdwallet reported that 30 percent of Gen Z have credit card debt and 27 percent have student loan debts. They are less likely to visit physical banks and more likely to prefer online banking. One Canadian study from Northwestern Mutual Life found that 25 percent of Gen Z understand the importance of having a financial plan.
Areas to focus on: Help them pay down debt, supplement your advice with tech-savvy solutions, and help them learn more about investing.
