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Gen Z, the folks currently between and 14 and 29 years old, are an interesting group, financially speaking and that’s something for advisors and parents to be aware.
Let’s assume for a moment that the youngest Gen Zers aren’t yet investing, which admittedly isn’t true across the board. Even if it’s assumed that the average member of this demographic waits awhile before getting involved in markets, they do so at an early age compared to other generations. Charles Schwab’s 2024 Modern Wealth Survey points out the average member of Gen Z started investing at 19 years old, far younger than the average of 35 years old among baby boomers.
However, and this is a point for advisors and parents to be mindful of, precious investing patterns don’t necessarily lead to top-notch financial literacy.
“an exam about the everyday mechanics of money, administered by the 2026 TIAA Institute-GFLEC Personal Finance Index, Gen Z correctly answered just 38% of questions—the lowest score of any generation measured. Early access to markets can predate financial literacy, paradoxically leaving young investors susceptible to poor investments,” observes Morningstar. “However, young investors can score a significant long-term advantage by taking a long view on investing and avoiding markets’ siren songs.”
Understanding Gen Z’s Risk Appetite
Ah, to be young again. Younger investors have the luxury of time, meaning they can take on more risk. In a hypothetical example, even a highly prudent advisor may well eschew a 60/40 portfolio for a 27- or 30-year-old client because that client can and arguably should be taking on more risk.
Broadly speaking, Gen Z does investing risk and it manifests itself in a variety of ways, including cryptocurrency, meme stocks, prediction market and sports betting. I wrote the following for another publication in March.
“Northwestern Mutual’s 2026 Planning & Progress Study notes that just 24% of Americans investing in cryptocurrency and 17% dabble in prediction markets or sports wagering, but those percentages jump to 32% across both categories among Gen Z and 35% and 24%, respectively, among millennials.”
Looked at another way, many Gen Zers view speculative assets, such as meme stocks, or activities such as prediction markets and sports betting as avenues for quelling fears of missing out (FOMO), and worse yet, wealth-building tools. Rightfully so, some members of this age cohort aren’t happy about factors such as elevated student debt and diminished access to affordably owning a home. They’re trying to play catch-up with potentially ruinous consequences.
“For Gen Z, the danger is not that they are investing young. The danger is that they are investing in an environment built to turn attention into action before understanding has had time to catch up,” adds Morningstar.
Advisors, Parents Are Important in this Situation
A lot can go wrong when tapping highly speculative investments or when embracing wagering as replacement for long-term asset allocation. A Gen Zer that loses what to them is a lot of money today on a meme stock may become disillusioned and forsake investing altogether, leading to significant lost opportunity cost.
Things don’t have to be that way and in situations like that, advisors and parents can be forces for good. Believe it or not, many Gen Zers acknowledge they trust advisors and their parents as reliable sources of financial guidance.
“When asked whom they trust, Gen Z investors ranked parents and financial professionals first, and social media materially lower,” notes Morningstar. “They are learning from a source they don’t trust, which underlines the gap between access and investing education that faces young investors.”
Something else for advisors and parents to consider as it relates to Gen Z’s embrace of prediction markets and sports betting: present the kids with the cold, hard truth. That include the points that just 1% of sports bettors are good enough to rely on that pursuit as their primary source of income and that more than eight in 10 prediction market traders lose money.
Related: A Nasdaq 100 Fee War Has Begun: What Advisors Need to Know About QNDX