Gen Z Seeking Investments that Align with their Values, but Unsure How to Begin Investing, U.S. Bank Survey Finds
01 August 2023 - 2:00PM
Business Wire
- Gen Zers view wealth differently than older generations, will
sacrifice returns to invest in causes they believe in
- More than 75% of young investors say social media makes
investing look easy
- Half of all investors feel overwhelmed, more pessimistic than
last year
Over the last few years, inflation, rising interest rates and
high costs for just about everything have impacted nearly everyone
– but for Gen Z, the economic environment has had a profound
impact, a new U.S. Bank survey found.
Members of this generation, who range in age from 18 to 26, are
overwhelmed by recent economic news, are unsure how to start
investing, compare their financial progress to others – including
their parents, people they see on social media, and people better
off than they are – and are highly motivated by experiences and the
pursuit of personal interests and opportunities. Members of the
Millennial generation, aged 27-42, share many of these same
feelings.
“Younger generations are dealing with inflation, high interest
rates, and high prices, but they also inherited a much different
world than older generations: since 1980, college tuition has
increased by 169%; the average price of a home is up 540%; and
average student-loan debt now sits at $37,000,” said Gunjan Kedia,
vice chair of Wealth, Corporate, Commercial and Institutional
Banking at U.S. Bank. “It’s no wonder they are unsure about
beginning an investing journey. But despite these headwinds, they
are passionate about investing in causes they believe in and are
seeking financial guidance.
“We did this survey to better understand the challenges the
younger generation is facing, how they are (or aren’t) investing
and why, and how we can help them start investing before they lose
too much time. Some of the findings that really stood out for me
are that financial worries and decision fatigue are impacting young
investors’ confidence, they are overwhelmed and unsure how to begin
investing, and nearly 80% of investors responded to the economic
climate by changing their investment strategies in some way in the
past three months.”
The new data is from a proprietary U.S. Bank survey of 3,000
active investors and 1,000 aspiring investors of all generations.
The survey was conducted May 12-24, 2023.
Additional key takeaways from the survey:
1. The pursuit of a better quality of life, personal
interests, and new experiences drive younger generations’
investment decisions
- 38% of Gen Z active investors say having a better quality of
life defines their view of wealth (vs. 35% of Millennials, 34% of
Gen Xers and 27% of Boomers)
- 25% of Gen Z active investors define wealth as being successful
(vs. 14% of U.S. investors overall)
- All generations agree that financial security is a crucial
factor in defining wealth (36% Gen Z vs. 61% of Boomers vs. 52% of
all U.S. investors)
2. Gen Zers view wealth differently than older generations
and will sacrifice returns to invest in causes they believe
in
- Top things that make Gen Zers feel wealthy: a better quality of
life, living life how they want and being successful (vs. Boomers’
top picks: having good health, being able to afford what they want
and not just what they need, and living life how they want)
- 65% of active Gen Z investors want to invest in causes they
care about
- 85% of active Gen Z investors would accept a return on their
investment that’s significantly less than the average return of the
S&P 500 (12% for the past 10 years); 30% would accept a 3% to
5.9% return; and 29% would accept a return of 6-8.9%
3. Investors are overwhelmed by recent events and are losing
faith
- 34% of active investors are more pessimistic about the future
of their investments than they were last year
- 79% have changed their investment strategies over the past
three months
- 69% of aspiring investors feel negative emotions (frustration,
anxiety, helplessness) when thinking about starting their
investment journeys
4. Younger generations compare themselves to others and
social media
- Just 6% of all Gen Z investors said they do not compare their
wealth and investment goals to anyone else’s (vs. 26% of Gen X and
40% of Boomers)
- Gen Z active investors are most likely to compare their
investment goals to their parents (35%), their friends (34%), and
to people on social media (27%)
- 3 in 4 of aspiring Gen Z and Millennial investors say social
media posts and influencers make investing look easy; this isn’t
necessarily translating to their own lives, however, as 73% of Gen
Z and 70% of Millennial investors still don’t know where or how to
begin investing
5. Relationships hold the key to building trust
- 62% of Gen Zers trust financial advisors to give financial
advice – more than any other generation
- 50% of Gen Z investors get financial advice from family; 40%
get it from advisors; and 36% look for advice on YouTube.
Millennials turn to family (44%), financial advisors (42%) and
friends (34%). Gen Xers look to financial advisors (44%),
traditional investment sites (38%) and family (38%). Boomers seek
advice from financial advisors (54%), family (31%) and traditional
investment sites (29%)
- Gen Z and Millennials look for advisors who are diverse and
share their values more so than older generations, who value an
advisor who takes time to listen to them and is
results-oriented
Read the full report here.
Methodology
U.S. Bank conducted an online survey May 12-May 24, 2023, of
3,000 active investors across the U.S. and 1,000 aspiring
investors. Sixteen percent of those surveyed were Gen Z (ages
18-26); 30% were Millennials (ages 27-42); 34% were Gen X (ages
43-58); and 21% were Boomers (ages 59+). Survey samples represent
U.S. audiences by age, gender, race/ethnicity, region and income.
Active investors have a minimum of $1,000 invested in stocks,
bonds, mutual funds/ETFs, cryptocurrency, an investment/brokerage
account or robo-advisor, CDs, and/or IRAs (not employer-sponsored
retirement plans) or make at least one investment a month in a
stock, bond, ETF, mutual fund or cryptocurrency. Aspiring investors
are defined as those who plan to make an investment within the next
year and may have money invested in stocks, bonds, mutual
funds/ETFs, cryptocurrency, an investment/brokerage account or
robo-advisor, CDs, and/or IRAs (not employer-sponsored retirement
plans).
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serves millions of customers locally, nationally and globally
through a diversified mix of businesses: Consumer and Business
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Wealth Management and Investment Services. Union Bank, consisting
primarily of retail banking branches on the West Coast, joined U.S.
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including being named one of the 2023 World’s Most Ethical
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Kristin Kelly, U.S. Bank Public Affairs and Communications
Kristin.kelly@usbank.com; 303.585.4129
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