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Nearly a third of Generation Z have started investing by the time they reach early adulthood, more than any other generation at the same age, according to a new survey by the World Economic Forum.
Thirty per cent of Gen Z — those aged between 18 and 27 — began investing in capital markets at university age compared with 15 per cent of millennials, and 5 per cent of baby boomers, according to the poll, which surveyed 13,000 people across 13 countries, including the US, UK, Brazil, China and India.
Experts say investing has become increasingly popular among young people, driven by the emergence of mobile apps that charge little to no commission and the abundance of financial content available online. In the UK, 64 per cent of Gen Z investors review and adjust portfolios at least once a month compared with only 34 per cent of baby boomers, the WEF found.
However, policymakers and regulators worry that too many are making their first foray into investing through cryptocurrencies. The UK’s Financial Conduct Authority said on Tuesday that there were “several million” under-35s in the country whose first investment was in crypto, despite the “very high risk that you could lose all your money”.
Last year, the FCA interviewed 20 so-called “finfluencers” under caution as it clamped down on people who may be promoting financial products without proper authorisation. It warned last year that nearly two-thirds of 18 to 29-year-olds follow social media influencers, of whom nine in 10 said they had been encouraged to change their financial behaviour.
The WEF research, conducted in partnership with Boston Consulting Group and Robinhood Markets, revealed that stocks remain the most popular investment across all age groups, with 60 per cent of investors surveyed worldwide saying they held the products. Some 27 per cent held cryptocurrencies and half held life insurance.
Cryptocurrencies were most popular among millennial investors, with 38 per cent holding the products. Thirty-five per cent of their Gen Z peers and 23 per cent of Gen X held the digital assets.
Young people are much more likely than older generations to deploy artificial intelligence tools to help them invest. An Opinium survey of UK investors for Fidelity International last month found only 1 per cent of boomers reported that an AI assistant influenced their financial decisions in the past two years, compared with 21 per cent of Gen Z.
The WEF report found global disparities in willingness to use AI. Almost 60 per cent of respondents in India and China also said they would allow an AI assistant to manage their investment. One in five in the UK and 28 per cent in the US said the same.
Kristian Manton, a chartered financial adviser at Octopus Money who became a fellow of the Personal Finance Society at the age of 21, said Gen Z has “more tools at their disposal than ever before and at much lower costs”.
But Manton, himself a member of Gen Z, warned that “people should not fall victim to the allure of quick gains from crypto or other very high-risk investments”.
“Younger generations are often bombarded with content from people trying to sell a trading course whilst sat in front of a Lamborghini that is likely rented — avoid these at all costs.”
Nearly 20,000 misleading or illegal financial adverts were withdrawn or amended by the FCA last year, almost double the number in 2023.
