Generation Z has been heavily influenced by social media platforms such as Instagram Reels and YouTube to learn about the world around them; this generation will, therefore, invest differently than previous generations.
They don’t download investment apps because they see a flashy ad saying “Start Investing Today.” The reason they are using these apps is because they have watched someone explain how compound interest works in 30 seconds, they have heard a creator break down what an SIP is or they have read a conversation that finally made them feel less intimidated about budgeting and managing their finances.
The education at this moment in WealthTech is changing; it is now perceived as an alternate method for acquiring prospective clients.
Traditional intent-based funnels would capture users at the point of action i.e., when someone searches for “The best investment app” or “How do I purchase shares” – but Gen Z does not typically enter the funnel in this manner. They discover finance passively, through content they actually enjoy consuming.
And the numbers reflect that shift.
A recent report by the World Economic Forum states that nearly 30% of Generation Z began investing while they were still in college or early adulthood. This is almost double the percentage of millennials who had the same experience at those ages (it was only about 15% of millennials). Most Generation Z respondents reported having learned about personal finance concepts before they began earning a steady income from a job, but that didn’t come from textbook education.
Instead, Generation Z has learned about personal finance through educational content – the same way prior generations learned about entertainment content.
Typical sources of personal finance education for Generation Z include short videos about exchange traded funds, podcasts about money management habits or an influencer openly sharing how they saved their first one hundred thousand dollars.
As a result of this trend, companies that use financial education as a way to convert leads into customers are performing better than those that use intent-based lead conversions.
The smartest WealthTech companies have realized that Generation Z is not motivated by pressure, but by clarity. If the platform assists in learning more about money, then a relationship of trust forms naturally. Once a sense of trust develops, then the chance for conversion increases.
You can see this already happening in the industry with many WealthTech sites currently investing significantly in using explainers, calculators, working with influencers, offering beginner-friendly content, and putting AI into their services to provide financial help. More and more WealthTech sites are beginning to look and feel like digital media versus financial companies.
This shift makes perfect sense because the traditional way the financial industry has presented itself has always been “complex” and/or “intimidating” for first-time investors. Using education channels to assist potential investors in making safer decisions reduces this feeling of intimidation; therefore, making them feel that investing is a possibility rather than an impossibility.
What’s also interesting is how this approach changes retention. Individuals who start their journey via a learning platform, which can offer them tremendous value, will be likely to continue using such an app over the long term. They will not only use the app simply to transact but will also associate it with growth and confidence, and better decision-making
That connection between the individual and their app has never been more important than in such a location as Wealth Tech.
Generation Z is not shying away from investing. In fact, Generation Z is entering the investment market sooner than anticipated. They prefer to have a thorough understanding of their investment options prior to actually investing.
And that’s why the future of WealthTech may not belong to the loudest platform in the room, but to the platform that teaches its users something valuable before urging them to invest.
About The Author:
Abbhinav R Jain, Co-founder & CFO at AdCounty Media, is an accurate analyst at heart. He combines a passion for numbers with a sharp business acumen. With a strong foundation in business operations, he plays a pivotal role in shaping AdCounty Media’s financial strategy and operational excellence.
