Bridging The Gap

Helping Gen Z turn financial confidence into financial literacy

by Kyle McMahan

Generation Z, those born between 1997 and 2012, is taking a more active role in financial decisions earlier than many generations before them. They are opening brokerage accounts, exploring crypto, following finance influencers on social media and engaging with financial topics before they have established long-term careers or full financial plans. That early interest is encouraging, but it also creates a responsibility for advisors to help turn access to information into real financial understanding.

A 2025 TIAA Institute-GFLEC Personal Finance Index study found that Gen Z scored an average of 38 out of 100 on a financial literacy test, the lowest score of any generation measured. That tells us something important. Gen Z is active financially and eager to learn, but many young adults are still building the foundation they need to make informed decisions. For advisors, that points to a meaningful opportunity to meet them where they are, strengthen their financial understanding, and earn trust through education and guidance.

Confidence Still Needs Context

Gen Z has grown up with instant access to information. They are comfortable researching financial topics, talking about investing, and making decisions through digital tools. That comfort is a strength. The challenge is helping them connect what they know to the broader financial decisions they will face, especially when it comes to a product like life insurance.

That’s where advisors can add real value. A young adult with student loans co-signed by a parent, for example, may not realize life insurance could help protect that parent from being left with the debt if something happened. Most young adults are not thinking through those scenarios on their own. Advisors can help by asking thoughtful questions, offering clear explanations, and helping clients see how today’s decisions fit into a longer-term plan.

A Multi-Generational Approach

One practical way to support Gen Z is through broader family financial conversations. Parents and grandparents are often already thinking about the next generation’s financial future. Some families purchase life insurance for children when they are young because it can help lock in coverage early, keep premiums more affordable, and create cash value that may be available later in life. It is a simple example of how planning early can create more options down the road.

These conversations should be approached with care and respect. Parents who are already reviewing retirement, protection or legacy goals may appreciate guidance on how to help their adult children start building a financial plan of their own. The conversation does not need to wait until a young adult is further along in a career. In many cases, the right time is when they reach a milestone, such as a first job, a first apartment, a car loan, a lease, or a benefits enrollment decision.

What Advisors Can Do Now

For many young adults, term life insurance can be a practical starting point because it is generally affordable and straightforward. As income, responsibilities, and long-term goals grow, they may be ready to consider other options, including permanent coverage. Whole life policies with cash value can also resonate with clients who want protection and a financial tool that may build value over time.

The key is to lead with education instead of product. Advisors can start with life events young adults already understand: a first job, a lease, a wedding, a child, or a loan someone else helped them secure. Existing client reviews can also create a natural opportunity to ask whether the next generation has the coverage and guidance they need. Short, clear and low-pressure education is often more effective with Gen Z than a traditional sales conversation.

Gen Z is not disengaged from money. In many cases, they are curious, motivated, and already taking action. What many still need is a stronger foundation for making financial decisions with confidence. Advisors who approach them with patience, clarity, and respect can help this generation build understanding now and make more confident decisions for decades to come.