Gen Z Trusts Financial Advisers, But AI Skills Matter

A young woman works with her financial adviser on a terrace.

(Image credit: Getty Images)

In a world increasingly defined by technology, it would be logical to assume that investors, particularly those in younger generations, seek financial advice from the latest digital innovation. That assumption is wrong.

Despite being digital natives, members of Gen Z who are entering the workforce aren't putting their complete faith in financial influencers or generative AI tools for financial advice. Instead, they are primarily placing their trust in financial advisers.

According to new research from CFA Institute, conducted to glean insights about recent graduates' outlook on their careers and wealth building, 91% of U.S. graduates report they trust human advisers the most.

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The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

That's nearly double the trust placed in online influencers (53%) and significantly more than those who say they trust AI tools like ChatGPT (49%).

To me, that says everything about where our industry needs to focus to support the needs of the next generation. We need people and technology.

The human element

Over the course of my career in wealth management, I have always believed that trust remains the foundation of good advice and productive adviser/client relationships. That belief has never been more validated. People and relationships build trust. Technology can augment it, but does not supplant it.

This trust-centric mindset is also reflected in Gen Z's motivations for building wealth, which are grounded in stability and long-term well-being rather than short-term trends or quick wins.

When asked their motivation, Gen Z graduates responded that they prioritize security over everything: 63% said their top driver is financial security, and 60% said it's the ability to meet day-to-day needs without worry.

I'm not surprised by these findings. They are practical, realistic concerns, not meme-stock fantasies, bitcoin bubbles or overnight riches, as the headlines may lead you to believe. Today's graduates largely aren't chasing hype.

They're looking for solid financial partnerships to grow their wealth for the long term.

This ethos is reflected in how they want to engage with wealth managers. Nearly half (45%) say they are most likely to work with someone they trust and who puts their interests first. They value relationships, collaboration and personalization.

That's both a challenge and an opportunity for our industry. Trust must be earned, not marketed. We must meet this generation where they are, with transparency, ethics, expertise and a deep understanding of their goals.

The best wealth managers establish relationships with their clients early and understand the underlying values and principles behind their desire to build wealth. They go beyond the dollars and cents, digging into the "why" behind the financial plan.

We must remain true to these fundamentals of fiduciary, client-centered advice, even as the world of finance continues to evolve at an increasingly rapid pace.

While a knee-jerk reaction may be to adopt each new tech innovation, or market every new tool, our superpower is keeping our human perspective and deep-expertise front and center.

Planning, not prediction

Another clear takeaway from our survey: Planning matters. Two-thirds (67%) of graduates said a solid financial plan is key to achieving their goals 10 years from now. Another 59% emphasized the importance of understanding financial markets and strategies.

This reinforces what many advisers already know. The best investment strategy is one that is rooted in the long term and tailored to the individual — not reactive, not totally algorithmic and certainly not influenced by the social media flavor of the month.

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We recently spoke with Yen Truong, a recent graduate of the Master of Science in Finance program at California State University, Sacramento, and current financial planning specialist at CAPTRUST, to glean additional insight into the advising landscape.

Yen underscored the importance of perspective as it relates to a career in finance. "A good adviser provides more than just financial strategies," she told us. "They build trust with their clients, educate them, and offer perspective during emotional and volatile times."

As our industry evolves and geopolitical strife continues to dominate headlines, reinforcing this value proposition becomes even more important. Financial advice is not just a transaction. It's a relationship. And it is built on integrity, empathy and professional excellence.

AI supports, not replaces

Of course, technology remains an essential and exciting part of the equation. Artificial intelligence has the potential to enhance, but not replace, the human adviser. Used responsibly, it can free up time, improve accuracy and unlock better client insights.

AI integration can also help to provide the type of personalized solutions that the next generation is looking for from their wealth manager, creating a unique experience that meets their specific needs. One-size-fits-all certainly does not apply as it relates to the wealth management relationship of the future.

Yen described AI as "a powerful tool for improving productivity in research analysis and investment operations," but emphasized that it has not, and cannot, replace the core of what advisers do.

This is the future I see: smart, empathetic investment professionals who are fluent in both financial markets and emerging technology. I believe the most successful people in finance will combine human intelligence with artificial intelligence — enhancing judgment, not outsourcing it.

As organizations, we can support our staff to upskill and leverage AI to ultimately benefit their clients. Our data shows that graduates recognize the importance of having AI skills and seek out employers who are willing to support them in their journey to leverage it.

To remain relevant, trusted partners, doubling down on what Gen Z is asking for gets us there: Human connection, personalized advice and a clear roadmap to financial security.

This generation is not looking to cut corners. They're looking to do it right. Our job as financial professionals is to meet them there. I believe this mindset doesn't just serve Gen Z investors, it elevates the standard for how we serve all clients.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Marg Franklin leads CFA Institute and its more than 190,000 members worldwide in promoting the highest standards of education, ethics, and professional excellence in the investment profession. Franklin has built her career over the course of more than 25 years in the investment and wealth management industries, in both institutional and private wealth. She is a CFA charterholder and a member of CFA Society Toronto.