Millennials, Gen Z want robo-advisors and digital financial advice

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Young investors are more likely than older generations to seek out financial help from a computer than a human. In addition, the Covid-19 recession has led to more interest among younger people in getting financial advice.

Financial advisors should take note.

Millennials, a group spanning their mid-20s to late 30s, and the younger Generation Z, will occupy a bigger share of the financial advice market as their corporate and business careers develop.

Some big names in the finance industry have already started responding.

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Vanguard, for example, which manages more than $6 trillion, debuted a digital-only financial advice service this year geared toward a younger clientele.

Why digital?

The coronavirus-fueled recession has hit young workers harder than any other age group. Unemployment among 16- to 24-year-olds ballooned to more than 24% in spring 2020 (from 8.4% the same time last year) compared to 11% for those over age 25, according to an analysis from the Economic Policy Institute.

Young investors tend to gravitate to online services because they grew up in the internet age and are more comfortable than older generations with digital interactions, experts said.

“Their exposure to the internet, social networks, mobile systems, AI and automation, all at an early age, make them the first generation to grow up in a hyper-digital world (most Gen Zers don’t recall the age of the flip phone),” Ashley Longabaugh, a senior wealth management analyst at the consulting firm Celent, wrote of Generation Z in a 2019 report.

Humans, too

Beyond investments

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