YPulse’s recent fintech behavioral report explores how young consumers’ digital preferences are continuing to reshape the financial world—fueling trends from peer-to-peer payment services to robo-advisors to digital financial resources that provide financial advice with little to no human interaction. The majority of young consumers over the age of 18 are managing their own finances, with 87% of 25-39-year-olds saying they do compared to 75% of 18-24-year-olds. During a year when young consumers’ finances were heavily impacted by the pandemic, they have prioritized saving money and investing, which they’ve listed as some of their top financial goals. (Our special report from last year found that 78% of Millennials took financial actions because of COVID.)
As young people start to think of their money more seriously, they’ve been looking for more financial tools and advice: More financial services have emerged in the last year to help teens start managing their money at an early age, and as investing becomes more popular among young people (thanks to the Reddit-GameStop frenzy), apps like Finary are attempting to socialize the investment experience for Gen Z. Social platforms like YouTube, Instagram, YouTube, and TikTok have also become havens for young users to turn to for money advice. Because of this, financial advisors have flocked to the app to help out users with tips on debt, savings, how to open retirement accounts, and other related topics. The hashtag #financialadvice currently has 56.4 million views, while hashtags like #investing has a whopping 3.4 billion views. And it’s has impacted behavior: Betterment reports that the number of accounts opened in last April doubled from the same time the year before after a “finluencer” suggested them in a video.
But while they can find financial advice in many places, that doesn’t mean they have the same level of trust for everything. So who do Gen Z and Millennials actually trust for financial information? Our most recent financial survey found out:
It may make headlines that young people are getting finance tips on TikTok, but the top source of financial advice they trust is far more old-fashioned: their parents. The majority of Gen Z and Millennials say they usually / always trust their parents to give them good financial advice, followed by financial advisors, which 52% of 13-39-year-olds say they usually / always trust. (Our research also found that 69% of 13-39-year-olds agree with the statement: “I trust financial advisors.”) The trust for financial advisors has grown more especially during COVID: A Northwestern Mutual survey found that 22% of Gen Z and Millennials say they’re looking for a financial advisor after getting along without one pre-pandemic, compared to 19% of Gen X.
Financial apps and blogs are number four and five on the ranking, and social platforms rank far lower in terms of trusted financial advice. According to a new survey from Credit Karma, 56% of Gen Z and Millennials intentionally seek out financial advice online or through social media, and YPulse’s data shows that the internet is one of their top sources for financial advice as well. However, our data also shows that while they may be finding financial advice on social media, that doesn’t mean they trust it as much as they do other sources.
That said, Millennials are actually more likely to trust social media for financial advice than Gen Z:
Gen Z is more likely to say they trust their parents than Millennials, with 70% of 13-20-year-olds stating that they usually / always trust their parents to give them good financial advice compared to 60% of 21-39-year-olds. Of course, most teens are still living with their families, and turning to them for current and future money advice while living under the same roof. Meanwhile, Millennials are more likely than Gen Z to say they trust their friends and financial advisors since they’re more independent and on their own, and can talk freely with their friends (who are most likely going through the same financial trials and tribulations as them) and afford to consult with professional financial advisors—and not just the ones on TikTok.
When it comes to financial and social apps, Millennials are currently more likely than Gen Z to say that they trust them across the board. But the lower numbers among Gen Z could be due to the fact that they’re just not in a phase in their lives where they have as much financial autonomy. It makes sense that for now they prefer talking to figures they’re more comfortable with, like their parents. But as they age up and become more financially independent, it’s likely that, like Millennials, their trust for digital sources will grow. That said, while Gen Z and Millennials are starting to trust online financial resources more, it still doesn’t outrank trust in close loved ones or professional advisors—for now.
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