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Fear, FOMO and Finance: Gen Z's Emotional Investment Landscape

Fear, FOMO and Finance: Gen Z's Emotional Investment Landscape

September 01, 2023

The emergence of Generation Z (Gen Z) as a prominent player in the fast-changing investing landscape brings about a distinctive interplay of emotions that significantly affects their financial decisions. This article explores the complex relationship between Gen Z's investment strategy and their emotions, which include optimism, caution, and a strong desire for influence.

Optimism and Proficiency

At the heart of Generation Z's investment journey is unwavering optimism, which is inextricably linked with their instinctive familiarity with digital technologies and effortless accessibility to a wealth of knowledge. According to a comprehensive Pew Research Center study, 59% of Gen Z members strongly believe that technology has benefited society.1  This digital prowess enables them to traverse complex online investment platforms with ease. Their expertise includes investigating investment opportunities, analyzing market trends, and finally making sound financial judgments.

Desire for Impact

Gen Z's interest in investment is greatly affected by their upbringing during the 2008 global financial crisis. This turbulent period has instilled in them an inherent sense of caution, cultivating a rigorous knowledge of financial hazards. According to a Deloitte survey, 81% of Gen Z participants express genuine worry about the state of the world and their own involvement in tackling global challenges.2  This fear influences their investing decisions greatly, as they emphasize stability and thoroughly examine potential hazards such as ethics, volatility, and the influence of social media before committing.

Notable for their progressive social conscience, Generation Z's financial decisions are inextricably linked to their intense desire to effect concrete change. According to EV Beacon Institute research, 62% of Gen Z members strongly feel that businesses should exist primarily to benefit society, exceeding the 49% reported among their millennial counterparts.3  This strong desire for meaningful contributions naturally extends to their investing choices. Morgan Stanley's Sustainable Signals research confirms this view, with a whopping 85% of polled individual investors showing a keen interest in sustainable investments. 4

Amplifying the Trends

Understanding the delicate ballet of emotions that informs their decisions becomes increasingly important as Generation Z asserts its position in the investment sector. Their distinct blend of optimism, skepticism, and an unquenchable quest for real impact acts as a guidepost on their investment path. Recognizing and addressing these emotional undercurrents is critical for financial institutions, educators, and consultants attempting to guide and engage this generation effectively.

By unraveling these emotional complexities, stakeholders may empower Generation Z to navigate the investment landscape, aligning their financial goals with their values and aspirations, and laying the groundwork for a future defined by smart, values-driven investments.

Effectively communicating with and relating to a Generation Z investor requires understanding their unique characteristics, preferences, and values. Generation Z, born roughly between the mid-1990s and mid-2000s, has grown up in a digital world with easy access to information. Here are some tips for financial advisors to engage with and relate to Gen Z investors:

Digital Communication: Generation Z is highly tech-savvy and prefers digital communication methods. Utilize social media platforms, instant messaging apps, and email to stay connected. Provide information in easily digestible formats, such as videos, infographics, and interactive content.

Transparency and Authenticity: Gen Z values honesty and transparency. Be open about the services you provide, potential risks, and fees involved. Authenticity is crucial in building trust and credibility.

Education: Gen Z is known for seeking out information independently. Instead of just telling them what to do, educate them about financial concepts, investment options, and strategies. They appreciate learning and making informed decisions.

Short and Snappy: Attention spans tend to be shorter in the digital age. When explaining complex financial concepts, use concise language and avoid jargon. Get to the point quickly to maintain their interest.

Socially Responsible Investing: Generation Z is concerned about social and environmental issues. Highlight socially responsible investment options and show how their investments can align with their values.

Personalization: Understand that Gen Z's financial goals and preferences may differ from those of previous generations. Tailor your advice to their individual circumstances and aspirations.

Mobile-Friendly Approach: Ensure that your website, communication, and investment platforms are mobile-friendly. Gen Z relies heavily on their smartphones for information and transactions.

Feedback and Collaboration: Gen Z values being heard. Encourage them to ask questions, share their opinions, and provide feedback. Consider involving them in discussions about their investment strategies.

Demonstrate Technology Use: Show that you are up-to-date with technology by using financial apps, online tools, and digital platforms. This can enhance your credibility with Gen Z investors.

Video Content: Use video content to explain concepts, share investment insights, and provide updates. Gen Z is accustomed to consuming information through video platforms like YouTube and TikTok.

Flexibility: Gen Z values flexibility in their investment choices. Offer a range of options, from traditional investment avenues to more innovative ones like cryptocurrencies, if appropriate.

Long-Term Focus: Encourage a long-term perspective on investing. Gen Z has the advantage of time when it comes to compounding returns, but they should also be prepared for market fluctuations.

Financial Goals and Aspirations: Take the time to understand their financial goals and aspirations. Whether it's buying a home, starting a business, or traveling, align your advice with their dreams.

Remember that while these tips provide general guidance, every individual is unique. Building strong relationships with Gen Z investors requires empathy, adaptability, and a willingness to understand their specific needs and preferences.


Vivian Du is a Generation Z Rockstar Market Research Intern at TPFG and rising junior currently pursuing a Bachelor’s of Science degree in Business Administration with an emphasis in Finance at the University of Southern California’s Marshall School of Business.

Her interests lie in the field of finance, market analytics, commercial, and corporate banking.

Reference list:

1 - "Email Rules the Workplace." Pew Research Center: Internet, Science & Tech, Pew Research Center, 31 Dec. 2019, www.pewresearch.org/internet/2014/12/30/email-rules-the-workplace/.

2 - "The Deloitte Global 2021 Millennial and Gen Z Survey." Deloitte US, www2.deloitte.com/cbc/en/pages/about-deloitte/articles/millennialsurvey.html. Accessed 31 Aug. 2023.

3 - "EY Beacon Institute." EY US - Home, www.ey.com/en_it/people/ey-beacon. Accessed 31 Aug. 2023.

4 - Sustainable Signals - Morgan Stanley, www.morganstanley.com/pub/content/dam/msdotcom/ideas/sustainable­signals/pdf/Sustainable_Signals_Whitepaper.pdf. Accessed 31 Aug. 2023.  

5 - Fidelity Institutional Asset. "Meeting the Moment: How Advisors Are Winning Young Investors." Financial Professionals, Fidelity Institutional Asset Management®, 17 May 2023, institutional.fidelity.com/app/literature/item/9909713.html.

6 - Charles Schwab Survey: Generation Investor, content.schwab.com/web/retail/public/about-schwab/ charles_schwab_gen_i nvestor _survey _find i ngs_0421-17N M .pdf. Accessed 31 Aug. 2023.

7 - Sustainable Signals - Morgan Stanley, www.morganstanley.com/pub/content/dam/msdotcom/ideas/sustainable­signals/pdf/Sustainable_Signals_Whitepaper.pdf. Accessed 31 Aug. 2023.  

8 - Gem Global Entrepreneurship Monitor, www.gemconsortium.org/report. Accessed 31 Aug. 2023.

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