Gen Z trusts family members and advisors – and not “FinTok” influencers – for financial adviceA new Northwestern Mutual Study finds Millennials want to talk to parents about wills, life insurance, inheritance and long-term care plans a full decade earlier than Boomers+. Access the complete study findings here.
MILWAUKEE, Nov. 7, 2023 /PRNewswire/ — Younger Americans say they are ready to have conversations about more sensitive family financial topics earlier on in life. From family budgets to inheritances to estate planning, the time to talk is trending sooner. As the 2023 holiday season approaches, Northwestern Mutual’s Planning & Progress Study is exploring this topic for the very first time.
The average American says the right time to talk with kids about their family’s financial situation is at age 17. However, the research discovered some significant differences across generations: Boomers+ say they had that first family conversation when they were 22, while Generation Z had it seven years earlier at age 15.
“Talking about money with your family used to be taboo in society, but today, young people are changing the conversation,” said Aditi Javeri Gokhale, chief strategy officer, president of retail investments and head of institutional investments at Northwestern Mutual. “Meaningful wealth discussions between generations are now happening earlier in life and more frequently. Beyond financial planning, these conversations are also moments to reconnect with children on values, hopes, expectations and the financial acumen they need to thrive today and long into the future.”
Northwestern Mutual’s study also found that Gen Z is the most likely to consider “family members” as the most trusted source for financial advice, followed by financial advisors. These sources score 15-to-20 percentage points higher than the often-popularized “FinTok” influencers on social media.
“I believe one of the emerging trends in financial services will be intergenerational wealth conversations,” said Javeri Gokhale. “In the coming decades, we will see the greatest wealth transfer in American history when Boomers shift $30 trillion in wealth, mostly to loved ones. But inherited wealth is not indefinite wealth, and many affluent families lose their accumulated wealth by the second generation. Gen Z continues to rely on parents for sound counsel as they emerge as young adults, but they also see advisors as financial experts that they can trust for advice. As Americans with teenage and young adult children reconnect with their financial advisors in the year ahead, I expect more Americans to add seats at the table for the next generation so the entire family can prepare for their financial future together.”
Talking To Aging Parents About Their Wishes
According to the study, nearly three in 10 (29%) U.S. adults have talked to their parents or guardians about an inheritance, will provisions and other matters related to their estates. But here again, there are signals in the data showing younger generations are placing a greater priority on having those conversations sooner.
When asked when people should initiate that talk with their parents/guardians, there was a full 10-year gap between what Boomers+ and Millennials suggested.
Another topic that is likely to come up sooner with aging parents and guardians is their preferences and options regarding long-term care. Just over four in 10 (43%) U.S. adults have had that conversation already. But younger generations are, once again, placing a greater priority on having that conversation sooner.
“At the end of the day, determining when to have these discussions is a personal decision that each of us needs to make for ourselves. But, families should have these challenging conversations at some point, because if they don’t, loved ones may need to make difficult decisions on their own. Younger generations are wisely choosing to talk sooner,” said Javeri Gokhale. “This is an opportunity for families to get on the same page about life insurance or an inheritance, and also ensure that a loved one’s wishes are understood, honored and planned for. The good news is that people are increasingly prioritizing open and honest conversations about finances among family members, and it’s an area where a trusted financial advisor can be a great resource.”
About The 2023 Northwestern Mutual Planning & Progress Study
The 2023 Planning & Progress Study was conducted by The Harris Poll on behalf of Northwestern Mutual among 2,740 U.S. adults aged 18 or older. The survey was conducted online between February 13 and March 2, 2023. Data are weighted where necessary by age, gender, race/ethnicity, region, education, marital status, household size, household income, and propensity to be online to bring them in line with their actual proportions in the population. A complete survey methodology is available.
About Northwestern Mutual
Northwestern Mutual has been helping people and businesses achieve financial security for more than 165 years. Through a comprehensive planning approach, Northwestern Mutual combines the expertise of its financial professionals with a personalized digital experience and industry-leading products to help its clients plan for what’s most important. With more than $570 billion of total assets being managed across the company’s institutional portfolio as well as retail investment client portfolios, nearly $35 billion in revenues, and $2.2 trillion worth of life insurance protection in force, Northwestern Mutual delivers financial security to more than five million people with life, disability income and long-term care insurance, annuities, and brokerage and advisory services. Northwestern Mutual ranked 111 on the 2023 FORTUNE 500.
Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, WI (life and disability insurance, annuities, and life insurance with long-term care benefits) and its subsidiaries. Subsidiaries include Northwestern Mutual Investment Services, LLC (NMIS) (investment brokerage services), broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company® (NMWMC) (investment advisory and services), federal savings bank; and Northwestern Long Term Care Insurance Company (NLTC) (long-term care insurance). Not all Northwestern Mutual representatives are advisors. Only those representatives with “Advisor” in their title or who otherwise disclose their status as an advisor of NMWMC are credentialed as NMWMC representatives to provide investment advisory services.