Understanding Gen Z financial mindset

Paul Nixon – Head of Behavioural Finance at Momentum Investments

Generation Z, informally known as Zoomers, is the demographic cohort succeeding Millennials and preceding Generation Alpha. Zoomers, have faced challenging formative years that have undoubtedly shaped their attitudes and outlook. Understanding Zoomers will be key for financial services providers who will compete for their wealth as they enter the economy, but also as they inherit wealth from Boomers and Gen Xers.

Zoomers have seen their parents getting hit hard in the pocket by the Global Financial Crisis of 2008 and the COVID pandemic.

Zoomers value security and their investment habits show this clearly. They rather buy cryptocurrency than stocks. Gen Z were created in a social media era and constant information environment. Technology and a connection to the internet is their thing. To capture Zoomers attention, make sure it’s a digital offering. In fact, they are nearly 50% more likely to take financial advice from social media.

According to Paul Nixon – Head of Behavioural Finance at Momentum Investments, Zoomers are more interested in investments that provide shorter term security and are available should the need arise. Momentum Investments’ 2022 research shows that Zoomers comprise a fraction of the execution-only trading accounts (approximately 5%) and are also surprisingly loss-averse given their youthful disposition.

Paul concludes by noting that getting the basics right like budgeting and using the 50/20/30 rule of budgeting will assist in reducing the anxiety experienced around finances. However, financial services providers will need to help Zoomers by providing investment vehicles that matter to them wrapped up in a slick digital experience that are referred to them by people that matter.

ENDS