The Akron Legal News

Login | February 26, 2024

Shattering stereotypes: Millennials and Gen Zs seek financial advice, but hesitate to hire advisors

Need generic art

Wealth of Geeks

Published: February 13, 2024

Recent survey results shatter the long-standing perception of millennials and Generation Zs as financially savvy, exposing a different and often overlooked side to their ever-evolving financial landscape.
According to an intelliflo study, 84% of millennials and Gen Zs acknowledge the necessity of professional advice on various financial topics. However, despite recognizing the importance of seeking guidance, these generations have hesitated to turn to financial advisors, citing uncertainties about where to find assistance and concerns about affordability.
The Benefits of Having a Financial Advisor
Expert guidance, time savings, and peace of mind are among the primary benefits that financial advisors can offer to millennials and Gen Zs. Individuals gain access to personalized advice and curated education beyond casual conversations with peers or online searches by engaging with a financial advisor.
Gregory Young, CFP, from Ahead Full Wealth Management, emphasizes that financial advisors can provide valuable context and tailored guidance that may need to be added to other sources. Facebook groups, for example, can inundate users with information, making it difficult to discern the most relevant and reliable advice.
"The best way that Gen Z can afford a decent financial advisor is by seeking one that caters to that generation," says Young. He highlights that advisors focusing on serving Gen Z will have the necessary infrastructure to support a business model centered around the demographic. Regardless of the fee model—hourly, asset-based, flat fee, or product-centric—, professionals are available at various price points as long as the client understands what services they are receiving.
Young emphasizes the importance of transparent communication between the advisor and client to avoid any value mismatch. By managing risk, enhancing financial literacy, and improving savings strategies, Gen Zs can save time, energy, and money through the guidance of a financial advisor.
Tim Melia, CFP, from Embolden Financial Planning, highlights the long-term advantages of working with a financial advisor, particularly for Generation Z. Melia stresses that making prudent investment decisions early in life can compound over time and significantly contribute to a successful financial future. Financial advisors can help Gen Zs navigate significant life decisions, such as homeownership, debt management, balancing family responsibilities, and finding a sustainable balance between enjoying the present and saving for the future.
"Generation Z can benefit from having a quality financial advisor," says Melia. To do so, it may be helpful to have the help of a financial advisor who sometimes helps investors stay the course for the long term in times of short-term volatility and can advise on many of life's financial questions." Advisors can construct financial goal plans that strike a balance between goals and provide advice on answers to many of these critical economic life questions. The key is finding an advisor who understands and caters to the unique needs of Generation Z.
How to Afford a Financial Advisor
Given their financial circumstances, affordability is a common concern for millennials and Gen Zs. Jamie Lima, CFP, MBA, of Woodson Wealth Management, outlines several strategies for making financial advisors more accessible to young individuals:
"Look for a fee-only advisor," suggests Lima. Fee-only advisors charge a flat fee for their services rather than earning commissions on the products they sell. This fee structure ensures transparency and can make their services more affordable for individuals on a budget.
Lima further advises, "Find an advisor who offers a sliding scale fee." Some financial advisors offer a sliding scale fee based on income or assets. This approach enables Gen Zs to access financial guidance at rates that align with their current financial situation.
Shopping around is another valuable strategy. Obtaining quotes from a handful of financial advisors for millennials and younger adults on find-an-advisor websites like Wealthtender or the XY Planning Network to compare their rates and services is worth the effort.
What to Look for in a Financial Advisor
Millennials and Gen Zs must consider a few key factors to ensure a successful partnership when selecting a financial advisor.
Certification plays a vital role. Look for advisors certified by reputable organizations such as the Certified Financial Planner Board of Standards (CFP). This certification demonstrates their commitment to high professional standards.
Experience is also essential. Seek local financial advisors or those who meet with clients online with experience working with millennials and Gen Z clients. Their familiarity with the unique challenges faced by these generations can significantly enhance the advisory relationship.
Furthermore, communication style is a critical consideration. Choose an advisor with whom you feel comfortable communicating. Effective communication is essential for understanding and implementing financial advice.
Finally, understanding the fee structure is vital. Ensure you know how advisors charge for their services and are comfortable with the fee structure. Complete transparency is critical to establishing a trusting and productive relationship.
Millennials and Generation Zs recognize the need for professional financial advice but have yet to seek it due to uncertainties about where to turn and concerns about affordability. However, the insights provided by financial advisors who serve these generations shed light on the benefits of working with professionals who offer personalized guidance, tailored education, and transparent fee structures.
By understanding the value financial advisors bring and exploring different fee options, millennials and Gen Zs can make informed decisions about their financial future. Moreover, by starting early, clarifying their goals, asking questions, and trusting their instincts, they can find the right financial advisor who aligns with their needs and budget.
Seeking professional financial advice is an investment in one's economic well-being, enabling millennials and Gen Zs to make informed decisions, achieve their goals, and build a successful financial future.
This article was produced by Wealthtender and syndicated by Wealth of Geeks.