A $73 trillion wealth transfer to younger generations is drawing attention to the rise of social media as a tool for financial advice for Gen Z and millennials, according to a report by the World Economic Forum (WEF).
“Finfluencers” — a segment of online influencers who share advice about money and investing on social media — are helping drive the democratization of financial information, a trend that is shaping investing behaviors, the report said. That comes as baby boomers (born 1946 to 1964) and members of the silent generation (born 1928 to 1945) are expected to pass down roughly $73 trillion to younger generations by 2045.
The WEF report also said that by 2030, women are poised to control a significant portion of the $30 trillion held by baby boomers in the U.S. And while Gen Z and millennials are entering the financial markets earlier than other generations, the financial services industry needs to innovate and adjust how it delivers advice, the WEF said.
Younger generations have more access to financial information, but it’s important to distinguish that from individually tailored financial advice provided by a regulated professional, said Meagan Andrews, lead of Capital Markets Initiatives at the World Economic Forum.
“Social media is such a powerful conduit to get people interested in personal finance and financial markets and to make them feel seen,” she said. “But also, the risks with misinformation and disinformation are real.”
Overall, the WEF identified six trends it said are important for the financial advice sector: changing demographics, goals of holistic financial well-being, the need for digitally accessible and highly personalized advice, transparent and fair pricing, and growing social media reliance.