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A Generation Set to Soar

Imagine having little or no memory of the 9/11 terrorist attacks.1 Or having lived your life always connected to the internet.2 Or checking social media up to 100 times per day.3 Or receiving 3,000 text messages per month!4

Welcome to Generation Z (or “Post-Millennials,” “Homelanders,” “Centennials,” or the “iGeneration”). Born between 1995 and 2011, these “young people” aren’t all young, ranging from age 8 to 24 (as of 2019),5 and they’re about to make some noise.

As members of this new generation enter adulthood, there’s increasing interest in their behaviors, lifestyle, and financial habits. For instance, adult members of Gen Z witnessed their older friends (Millennials) struggle to land well-paying jobs while amassing significant debt; 40% of Millennials overspend to keep up with their social lives.6 Plus, by coming of age during the Great Recession, Gen Zers have a pragmatic view of the world of personal finance.7 They focus on preparation and being financially responsible.8

Gen Zers…

  • live in an “always on” technological environment9
  • have an 8-second attention span (on average)1
  • begin researching financial planning at age 13 (on average)8
  • are skeptical of institutions (government and colleges, for instance)10
  • share less on social media than previous generations (privacy is important)
  • prefer social channels SnapChat, Instagram, and YouTube (72% visit YouTube daily)1
  • seek inspiration and ideas from many sources11
  • embrace differences that make us all unique11
  • are 25% Hispanic; 52% non-Hispanic white12
  • believe in the YOLO (you only live once) philosophy13
Genz

ADVISOR TACTICS FOR GEN Z

  • Brainstorm channels and unique messaging you think will resonate
  • The more positive and uplifting you can be, the better!

3 KEY GEN Z VALUES

world

VIGILANCE

Not shying away from the realities of the world. They recognize that social, environmental, political, and financial concerns abound.

“I will speak out against things I want to change.”

 

openness

RESOURCEFULNESS

Taking their futures into their own hands. They celebrate the hacker mindset and develop creative problem-solving solutions.

“I will develop skills to add stability to my unstable world.”

 

hands

OPENNESS

Expecting and valuing diversity. They embrace how people differ in culture, gender, race, politics, sexuality, and ability.

“I will support your right to be different and express those differences.”

 

SOURCE: Kantar Consulting, Centennials: The Global Youth Generation Webinar, 201814

Ready, Set, Grow!

Data finds that Gen Z is the most racially and ethnically diverse generation (even more so than Millennials) as well as the most well-educated generation.12 Although they’re careful with their money, they like to donate and get involved in social issues.15 They’re continuing the downward trends of teen alcohol use, teenage pregnancy, and smoking.16 And they want to change the world. 17

Words they live by

You do you
Create a workaround
Find your purpose
Plan for the future
Tech is life and life is tech
Be an agent of change

Genz

ADVISOR TACTICS FOR GEN Z

  • Create communication efforts that align with their values
  • Prepare to connect with a widely diverse group

Myth Busters

What you think you know about Gen Z may not be true. Let’s bust some myths!

Gen Zers are so entrenched in technology
they avoid face-to-face interactions.

Surprisingly, it’s the opposite. Gen Zers prefer personal interactions, when they can get them, instead of electronic messages.18

Gen Zers want independence, not collaboration.

Teamwork is important to Gen Zers, who prefer to carefully balance independence with a collaborative environment.18 Despite the workplace becoming increasingly digital, more than 90% of Gen Z prefer to have a strong human element on their teams.19

Gen Zers prefer alternative work environments

Instead of gig arrangements, Gen Zers really want traditional, in-office employment environments.20

How does this generation
stack up against others before it?

Gen Z members will make up 40% of consumers by 2020.8

And they already wield a purchasing power of between $29 billion and $143 billion.21 This is a confident bunch when it comes to their financial futures.22

Wow! 89% of Gen Zers say planning their financial futures makes them feel empowered. 7

This may be influenced by what they’ve seen when growing up. During the Great Recession, Gen Zers watched the median net worth of their parents (Gen Xers) drop 45%.8 It’s no wonder they desire job security and say job preparation is the point of a college education.8

88% of 2017 college grads — the 1st Gen Z graduating class — chose their major with job availability in mind.8

TOP EXPECTED CAREER PATHS

Medicine/Health Care

medical
0
%

Sciences

science
0
%

Biology/Biotechnology

biology
0
%

Business/Corporate

business
0
%

SOURCE: Hackernoon.com, How Gen Z Is Confronting Their Financial Fears Infographic, 20188

Genz

ADVISOR TACTICS FOR GEN Z

  • Develop a wants/needs list that addresses this generation specifically
  • Use their openness to change as a way to connect on their level

According to Gen Z students

0
%

already own their own business8
or
plan on owning one in the future8

For those already in the workforce, they look for full-time employment, enjoy an office setting, and want job stability.

Passion or Paycheck

As the oldest Gen Zers graduate from school, they face one of their first serious moral dilemmas. They want to make a meaningful impact on the world, and they’d love to have a job they feel passionately about.23 After all, why spend numerous years in school just to end up with a job you don’t care about? Yet once they understand the requirements of becoming financially secure and independent, their passion may have to take a back seat to earnings (and the job stability they also covet).7 In this way, Gen Zers mirror the realities previous generations have faced.

Genz

ADVISOR TACTICS FOR GEN Z

  • Develop a wants/needs list that addresses this generation specifically
  • Use their openness to change as a way to connect on their level

Gen Z vs. Millennials

How does Gen Z’s spending potential compare to that of a generation you likely know very well — Millennials?

  • The typical Gen Zer lives in a household with an annual income of roughly $63,700, slightly higher than Millennials’ household income of $62,400 (2018 vs. 2002 in inflation-adjusted dollars).
  • Gen Zers are less likely to be in the labor force: 58% of today’s 18- to 21-year-olds worked in the prior calendar year compared to 72% of Millennials when they were 18 to 21 years old.
  • The high school dropout rate for the oldest Gen Zers (ages 18 to 20 in 2017) is significantly lower than that of similarly aged Millennials in 2002.
  • Gen Zers are postponing marriage longer than Millennials at a similar age: Only 4% of Gen Zers ages 18 to 21 are married, while Millennials in 2002 were nearly twice as likely (7%).

If you know Millennials, you can use what you know of their personality traits to connect with Gen Zers because they share similar opinions on many social and political issues.

SOURCE: Pew Research Center, Early Benchmarks Show “Post Millennials” on Track to Be Most Diverse, Best-Educated Generation Yet, 20181

GEN ZERS ALREADY OWN

Savings Account

piggybank-1
0
%

Checking Account

check-1
0
%

Health Insurance

health-1
0
%

Credit Card

cards-1
0
%

SOURCE: Hackernoon.com, How Gen Z Is Confronting Their Financial Fears Infographic, 20188

Genz

ADVISOR TACTICS FOR GEN Z

  • Stay transparent about your practices and challenges
  • The client-advisor relationship you develop should recognize their situation and goals and, most of all, fit their unique needs

Hard workers. Frugal spenders.

Of recent Gen Z grads:

0
%

are willing to work evenings and weekends7

0
%

have completed an internship or apprenticeship7

0
%

earn extra money through freelance work, a part-time job, or an earned allowance7

Dollars and Sense

It makes sense; even at their young age, Gen Z is proving to be a frugal and fiscally responsible group. As more enter the workforce and invest their savings, it’ll be interesting to see what comes of their practical approach to money.

dollars
0
%

cost is the most important factor of a purchase7

mobile
0
%

use their phones in-store to check prices7

university
0
%

will attend college in-state to save on tuition7

Make their best interests
your best interests

71% of Gen Z employees say they are moderately to very stressed about finances.22 Top stressors? Purchasing a home (67%) and living paycheck to paycheck (66%).24

A study of a group of 2,500 teens found that two-thirds had already opened a bank account and were as much as three times more likely to have taken a financial education class than Millennials.25

While that’s proactive and positive, one study showed that 46-56% of high school students don’t understand what’s factored into a credit report or credit history; many believe bill paying is a factor when it isn’t.25

So obviously, financial education, training, and guidance are necessary. While this group may instantly look to advice from parents (not the best financial help25) and the internet (just like every other need they have), personalized financial assistance can be so much more helpful.25 Strive to help Gen Z understand when their own research is fine and when it falls short.

Although the current age range of Gen Z runs from young adults in the workplace to elementary school students, you can determine the level of assistance they need to build financial literacy and knowledge, helping them make good decisions along the way.

Genz

ADVISOR TACTICS FOR GEN Z

Consider sharing information on their shortand mid-term issues:

  • Basic budgeting, managing money
  • Credit, credit history, and responsible credit habits
  • Saving for college
  • Renting/buying a house and mortgages
  • Credit union or bank as a primary financial institution

GEN Z IS READY TO TAKE OFF!

At 61 million strong, Gen Z is larger than the Millennial or the Baby Boomer generation.26 And they’re poised to have a tremendous impact on the workforce.26 In fact, within a decade, they will constitute about 20% of the U.S. workforce26 and will possess more buying power than Millennials and Boomers combined.25 Yet Gen Zers require reliable information to improve their financial literacy and understand how financial services are produced and distributed.

In all touchpoints with Gen Zers, reinforce that you’re ready to share your knowledge and assist them. Those in Generation Z have incredible potential to become long-term clients. Building a solid foundation of a real relationship now can translate to loyalty and trust down the road.

Transfer-Wealth

 

Great-Wealth

 

Learn more by visiting smartriskcontrol.com, contacting your wholesaler, or calling the CUNA Mutual Annuity Solutions Desk at 877.345.GROW (4769)

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