The diverse and digitally savvy generation are increasing their rate of contributions
Generation Z employees showed a different approach when it comes to investments compared to the generations before them, as reported in separate studies conducted by the Financial Industry Regulatory Authority Foundation (FINRA) and the CFA Institute in an article by PLANSPONSOR.
“The Gen Z population is diverse and digitally savvy,” said FINRA president Gerri Walsh in a press release.
Being the generation born after 2000, they were much more exposed to the technological advancements of the time and are more knowledgeable about it in contrast to the older generations. This allowed them to utilize technology when it comes to their investments.
“They are using mobile technology to enter the financial markets in unprecedented numbers and consulting a wide range of information sources as they do so. It is vital to understand their investing decisions and to provide them with the educational tools to prepare for those decisions.” Walsh further explained.
An interest in retirement benefits
Gen Z employees appear to have more interest in retirement benefits compared to colleagues belonging to older generations.
Data from the Bank of America’s report about the second quarter of the year showed that Gen Z employees had been increasing their rate of contributions to retirement plans by 19.3% which is more than employees from Gen X and Millennials.
In the report, Millennial participants had an 11% increase in their contribution while the Gen X respondents only had a 9.7% increase.
A preference for crypto and NFTs
In the Q2 report of both FINRA and CFA, more than 55% of Gen Z investors have invested in cryptocurrency. 41% of them invested in individual stocks while 35% invested in mutual funds.
FINRA’s research further found that 23% of Gen Z investors have also invested in exchange-traded funds in comparison to Millennials who only had 26% and Gen X who had 22%. 25% of Gen Z were owners of non-fungible tokens (NFTs) while only 28% of Millennials and 15% of Gen X had them.
Influenced by media
When it comes to their preferred source of information about investments and financial topics, 48% of Gen Z investors preferred social media. In contrast, only 42% of Millennials and 26% of Gen X shared this preference.
Older participants seemed to prefer internet searches and general websites more with 53% of Gen X investors, 49% of Millennials, and only 47% of Gen Z saying that they used them in their hunt for information about investing and finance.
“These new entrants to the world of investing are reshaping investment practices, products and platforms,” Paul Andrews, managing director for research, advocacy, and standards at the CFA Institute, said in a press release.
“A range of macroeconomic and social factors such as rising inflation, the growing popularity and accessibility of cryptocurrency and social media ‘finfluencers’ are having a profound impact on how, where and what they invest in.”
