Millennial and Gen Z consumers want financial advice but don’t know where to start

Josh Grace

Contrary to the widely held belief that financial advice is only for older, wealthier Australians, new research commissioned by Colonial First State (CFS) has found that Millennial and Gen Z consumers are the most open to advice and the most willing to pay for it.

CFS commissioned market researcher Nature to survey almost 2000 consumers in July 2023, including more than 1200 aged 16 to 39. The research found that over half (53%) of under 40s are open to advice, compared to 36% for those aged 40 to 59 and 15% for those over 60. However, despite being open to advice, 35% of under-40s admitted they couldn’t afford it.

Josh Grace, Group Executive – Customer Office at Colonial First State, said that while cost remains the most significant barrier for those under 40, there is also an awareness and knowledge gap.

“Many younger Australians want advice but don’t know where to start. The research found that 18% of under 40s don’t know the right questions to ask and 15% admit they don’t know how to access a financial adviser,” he said.

“It is critical that younger Australians who clearly want advice are able to access it.”

Mr Grace said there is also a role for different advice models to emerge, like digital advice, which can help bridge the gap until they can afford more comprehensive, face-to-face advice.

“We want more Australians to get some type of advice and we also want to see financial advisers freed up to be able to provide more tailored and single-topic advice so they can support more Australians to achieve their financial goals,” he said.

“CFS supports a vibrant advice sector. We want to see more Australians benefiting from access to advice and we want it to be easier for financial advisers to provide advice to those who need it.”

The research found that over half (53%) of all Australians are open to digital advice. Only 20% are not open to it and 28% don’t know enough about it to say if they are open to it or not.

There is an even stronger demand for digital advice among younger consumers. Two-thirds of Australians under 40 (63%) are open to a digital advice solution, including one in four who have used it before.