With WealthTech helping to democratise access to investing, people have started to plan their financial future from a younger age. However, as they age will their habits change?
The World Economic Forum recently claimed that 30% of Gen Z began investing in university or early adulthood. This is compared to 15% of Millennials, 9% of Gen X and 6% of Baby Boomers. It also claimed that 86% of Gen Z had learned about personal investing by the time they entered the workforce, compared to 47% of Boomers.
The internet and social media have helped younger generations become more aware of wealth management. In tandem, WealthTechs have provided them with quick and simple ways to invest into a variety of asset types, with opportunities available to people regardless of how much spare cash they have.
While getting involved with investing from a younger age is great, not all the habits are healthy. For instance, the trust many have with social media finfluencers is risky. But what are the traits of younger investors?
Jurgen Vandenbroucke, PhD, managing director everyoneINVESTED, explained that Gen Z and Millennials tend to be digitally native, using mobile-first platforms, self-directed investment tools and social investing communities. They are also purpose driven. “Many seek alignment between their investments and personal values, such as sustainability or social impact,” he said.
Finally, they are risk-tolerant, with them showing greater appetite for high-growth assets, such as digital assets and venture-style investments.
Vandenbroucke added, “This rejuvenation of the investor community has led to a modal investor profile that is younger and more risk-tolerant than in previous decades. This shift has implications not only for product design but also for how financial advice is delivered and scaled.”
Fredrik Davéus, CEO and co-founder of Kidbrooke, also outlined some defining characteristics of Gen Z and Millennial investors. For instance, he also noted their strong sense of ‘values-based investing’, whether it is for sustainability, ethical business practices or social impact. “For institutions, this presents both a challenge and an opportunity: products and advice must align with a client’s personal identity and beliefs, as well as perform financially,” he added.
He also attributed to them a value for accessibility, transparency, and control. He noted that they are comfortable making decisions online, but are highly skeptical of opaque or jargon-heavy financial communication, “They want to understand why a recommendation is made, not just what it is.”
He added, “We see it as a case of empowering investors to see the long-term implications of their choices in clear, relatable terms.”
A high-risk appetite
As mentioned, one of the common traits of a younger investor is their interest in high-growth assets and alternative investments particularly digital assets.
As they get older, it raises the question of whether they will continue to back these high-risk assets or transition to more stable and traditional assets. fincite founder & co-CEO Ralf Heim believes this is exactly the case. He said, “A strong focus on Tech Stocks and Crypto Assets might be great when you are young, but as you age diversification becomes more important.”
On a similar note, Davéus said, “Risk tolerance is dynamic, shaped by life circumstances. As younger investors take on mortgages, raise families, or plan for retirement, their financial goals will become more specific and time-bound, naturally leading to a more balanced approach.”
However, while interest in risky assets might lower, Davéus believes there will still be a focus on innovation and change. He said, “Their comfort with innovation is here to stay. They may remain open to newer asset classes like digital infrastructure or private markets, provided those opportunities are presented through transparent and data-backed tools. The key will be delivering holistic modelling: showing how these choices affect their entire financial picture.”
Vandenbroucke had a different opinion. While he noted that moving into later stages of life will increase their financial responsibilities, it might not mean they are less prone to risk. He said, “Classical behavioural finance suggests that risk tolerance tends to decline with age. However, this may not fully apply to digital-native generations. Their early exposure to volatile markets and alternative assets may cultivate a more resilient risk mindset, albeit one tempered by experience.
“We can expect a gradual rebalancing of portfolios toward more stable, income-generating assets. Yet, the preference for transparency, control, and thematic relevance may persist. Passive investing, already popular among younger cohorts, is likely to remain a cornerstone of their strategy. While this supports long-term investor retention, it also raises concerns about market efficiency. As highlighted by Eugene Fama’s Efficient Market Hypothesis and the Inelastic Market Hypothesis of Gabaix and Koijen (2021), excessive reliance on passive flows may erode price discovery and amplify systemic risks.”
A shift in communication demands?
Younger generations notoriously prefer digital experiences that do not require going into a branch or speaking to an advisor. However, as they get older and the size of their portfolio increases or they need a new strategy to support through retirement, will they continue to favour digital or look for more support from human advisors?
Davéus believes that they will likely transition towards a hybrid approach to advice. “As investors’ needs become more complex, human advisors will play a vital role but their work will be increasingly powered by analytics and intelligent automation behind the scenes.
“Younger generations won’t accept a purely manual or opaque advisory process. They’ll expect their advisor to use the same quality of digital tools they use elsewhere, and to deliver advice that is both personal and scalable, with clear explanations and consistent outcomes”
On the other hand, Heim is less confident there will be any shift in their mindset, with them more reliant on digital services. He said, “It’s the billion-dollar question. If your app provides you great insights and you learn much about investments, the Do-it-Yourself approach might become a default option. Especially when your financial advisor cannot provide the same quality of digital experience.”
That being said, Heim does see some areas of the financial plan where human advisors could remain a vital aspect. For instance, they could seek human advice for topics around estate planning and financial decisions, but there will still be more digital touchpoints than previous generations have.
As for Vandenbroucke, he believes the desire to speak to a human could arise if financial decisions grow in complexity, particularly in times of market stress or life transitions.
He said, “Technology has undeniably improved accessibility to investment services. But it may also increase exitability, the tendency to disengage during downturns. This underscores the importance of tools that support conscious decision-making, grounded in sound methodologies and behavioral insights.
“At everyoneINVESTED, we believe that the scalability of investment services must be built on platforms that are not only easy to use but also personal, valuable, and reliable. Our mission is to empower investors with tools that foster informed choices, reduce emotional bias, and enhance long-term outcomes.”
The generational wealth transfer
Over the coming years, the generational wealth transfer will transform the financial ecosystem. Younger generations are expected to inherit trillions of dollars as they become the main clients for wealth management firms. While previous generations were happy to stick with their family financial advisor, younger generations show less loyalty and will happily switch to providers that offer them better services. Firms will need to ensure they can meet their demands of the new clients or risk losing significant market share.
As such, the wealth transfer will define the market for the next decade. Davéus sees there being three key shifts. The first of these will be the move from products to experiences, with investors less interested in what fund they own and more about how well their financial journey is supported.
Secondly, there will be a move from opaque models to explainable analytics, with trust playing a key role within this. Finally, there will be a shift from traditional advice to embedded wealth experiences, with financial advice built into everyday ecosystems, from banking apps to employer benefits platforms.
He added, ” In short, the next phase of wealth management will be data-driven, embedded, and human-centric. Technology will make advice more accessible, contextual, and aligned with real-life decisions. The challenge for the industry isn’t to “retrain” these generations, but to evolve advisory models to meet their digital expectations as their financial complexity grows.”
Heim sees the biggest change to come from the wealth transfer will be the dominance of technology.
He said, “Technology will become central. For wealth management strategies: I believe that reaching personal financial goals will become the ‘new alpha’. Wealth management strategies will get far more personalised and the era of standardization where a customer gets funnelled into 1 of 7 Model Portfolios will be ending.
“Great advisors will leverage tech and AI to become 3x Advisors (3x better customer experience than their offline peers). They will be able to serve far more customers with a far better experience.”
On a final note, Vandenbroucke explained, “While younger generations may adjust their investing habits as they age, many of their core preferences, shaped by digital fluency, social values, and early market experiences, will continue to influence the evolution of investment services. The challenge and opportunity lie in designing systems that respect these traits while guiding investors toward resilient, long-term financial wellbeing.
“At everyoneINVESTED, we are committed to leading this transformation, making investing not just accessible, but meaningful.”
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