The latest research into financial advice has shown there is a significant opportunity for practitioners to provide their services to individuals belonging to a younger demographic than they traditionally may not consider including as clients.
The Russell Investments “Value of an Adviser” report revealed certain younger Australians, who are not currently receiving financial advice, are open to using it as a means to help them navigate an effective wealth-building path.
“There is an untapped unadvised market and surprisingly enough it’s in a demographic you wouldn’t expect and that is what we call gen Z,” Russell Investments managing director and head of distribution Neil Rogan told attendees at the launch of the report in Sydney last week.
Rogan pointed out this cohort’s appetite for advice is related to what they refer to as ‘canon events’.
“A canon event is an unexpected event that happens in the life of someone and gen Z often is aware of what canon events can be,” he explained.
He recognised other character traits that are typically associated with this group of potential clients as well.
“A couple of things about them is that they’re more likely to invest related to their values, [that means] sustainable investing and those types of things. [Also] 68 per cent of them are usually female looking for advice and then finally they are less fee sensitive than any other demographic out from baby boomers all the way through to [generation X],” he said.
Honeycomb head of quantitative strategy Jason Morris noted the lack of fee sensitivity generation Z exhibited fits in with their values regarding their lifestyle priorities and career goals.
“Remember that they’re willing to pay $5000 a year for a gym membership, they’re paying for professional development as well in terms of improving themselves, so they’re absolutely willing to pay for professional development around their finances,” Morris indicated.
