The 76 million who make up the youngest American adults have values and priorities that are very much their own and advisors hoping to engage with them will need to recognize this.
A new study from Edward Jones reveals that those aged 18-34 are having a tough time right now – most say they are struggling or merely surviving in life – but they are also optimistic that better things are ahead for them.
The research, conducted alongside Next360 Partners and MarketCast, also found that this cohort’s view of financial resilience has been informed by their parents’ experiences during the Great Recession and the challenges of the pandemic and cost-of-living crisis in the last few years.
"Our research offers a deeper understanding of GenNext, an age group defined by their shared experiences, not the year they were born," said Lena Haas, head of Wealth Management Advice and Solutions at Edward Jones. "With most worried about rising costs and an inability to save, this will have vast implications for the wealth management industry. Our purpose calls us to identify how we might help this age group plan and reach their life goals — across health, family, purpose and finances."
GenNext are a diverse and values-driven group.
Half of those polled identify as non-white and 17% say they are LGBTQ or prefer to self-describe their sexual orientation. A significant share is educated with 1 in 3 having some college education and 1 in 4 having a bachelor’s degree or higher.
They are also digital natives, but this does not mean they devalue personal and face-to-face connections, or that they have wildly different life and financial goals from previous generations including marriage, homeownership, and starting a family.
They are typically juggling work, studying, gig work, and other priorities. Most of all they aspire to be comfortable.
GenNext have a positive view of retirement but don’t expect to attain the same level of financial stability as their parents.
Just 31% have a retirement account and work is set to be more fragmented than previous generations.
"They want flexibility in where and when they work, and are open to nontraditional career paths," Haas added. "Naturally, this group will have diverse financial needs impacting how they save, spend and invest. It was important for us to understand their needs and encouraging to see that they are open to advice where there may be gaps."
Young American adults need financial advice but only 12% have a financial advisor but 41% of those who don't say they plan to someday, and 68% view financial advisors as a sounding board for ideas with 66% preferring in-person interactions with their financial advisors.
Just 20% turn to social media or influencers for financial information.
GenNext’s focus tends to be on everyday expenses rather than longer term goals and only about half (57%) have health insurance and less than a third (27%) have life insurance.
"Working with a financial advisor can improve your financial knowledge and confidence and help you feel more in control," added Haas. "Our research found that 68% of GenNext don't think they have enough income or savings for professional financial advice. But it's never too early to get started.”
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