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: Saving for retirement on TikTok? Gen Z invests differently

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Zaid Admani is a millennial and a civil engineer, and he’s trying to get young people to think about money — and their futures. 

Admani, 29, has been promoting financial literacy on TikTok. Under the profile “admani_explains,” he posts videos on the social network to his nearly 260,000 followers discussing recent investing news or concepts. In one video, he broke down how PayPal
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co-founder Peter Thiel used his Roth individual retirement account to amass $5 billion. In others, he explains how financial news might impact a person’s daily life, such as the latest contender in the streaming wars. 

His followers have asked him a wide variety of questions, including his opinion on a financial topic or just how to get started earning, saving and investing at a young age. He has partnered with financial brands, including the online investment firm Betterment, to spark these sorts of conversations with younger viewers through sponsored content, which he gets paid to do. He has also partnered with investing company Public.  

Members of Generation Z, who were born in the years 1997 to 2012, may be too far removed from retirement to think about saving for it, but financial institutions are attempting to engage with them all the same — in some cases, by working with influencers on TikTok to talk about investing. 

“Using social media, there’s more good than bad,” Admani said. Yes, people shouldn’t blindly trust someone just because they have a large follower count, but a demographic that may otherwise not have heard or talked about investing because they are young or just starting their careers will now become exposed to these discussions as a result, he added. 

TikTok and other social media sites are a more informal and less intimidating arena to begin learning about investing. “It’s just meeting people where people spend time,” said Dan Egan, vice president of behavioral finance and investing at Betterment. 

Admani isn’t the only one talking about financial news and tips on TikTok. Gil Oliveira posted a video on TikTok explaining how someone under 25 could retire a millionaire with a Roth IRA. TikTok creator Austin Hankwitz posted a similar video for people between the ages of 18 and 25 years old. Adi Adara broke down the benefits of traditional and Roth 401(k) plans in one video.

Retirement itself has evolved significantly. The age at which someone retires is no longer traditionally 65 years old — for some people, it’s years later, while for others, it’s decades earlier. For most savers, the responsibility for having enough money in their old age is on them as companies have shifted away from pension plans. Although financial experts urge workers to contribute to an employer-sponsored retirement account, like the 401(k), not everyone has access to such a plan. There are always myriad financial responsibilities people have to manage alongside retirement savings as well, such as paying off student debt, balancing family obligations, buying a home or starting a business, to name a few. 

TikTok isn’t the only way financial institutions are engaging with young generations who currently or one day will invest. Firms that may have typically catered to workers through workplace accounts or more traditional access points are looking for interactive ways to welcome new investors. Doing so not only brings in new customers, but potentially keeps them over the span of decades as they work their ways through their careers into old age..

Fidelity Investments, a multinational financial services company, created Fidelity Spire, an app to help users plan, save and invest with short- and long-term goals in mind. In the first quarter of 2021, Fidelity’s new retail investors 35 years old or younger reached 1.6 million — a 220% increase compared to the same quarter the prior year. 

“We’re excited to see these young adults get involved,” said Ashley Tran, an investment solutions team leader at Fidelity. “We see it as a responsibility to be there, give them the correct education and make sure they feel empowered about their investment decisions.” 

Overall, many firms are seeing their younger investors focus on nearer-term goals. Fidelity’s young clients are looking to pay for a wedding or start a family, for example, Tran said. On Betterment’s platform, young investors are setting up goals for car and home down payments too. 

Financial institutions are watching what this newest class of investors are currently doing or want. For example, younger generations want to easily navigate through a digital interface, but they also want access to invest in numerous options for their portfolios, said Daniel Demian, a financial adviser at Albert Investments, a financial planning app. This includes the ability to invest in newer, emerging asset classes like cryptocurrency

For other new investors, it’s all about brand awareness. “The younger generations are very conscious of who they are doing business with and so brand really does matter to them,” said Kate Wauck, vice president of communications at online investment firm Wealthfront. 

Wealthfront recently added socially responsible options — something young investors have expressed interest in, data show. In the first quarter of 2020, even during a global pandemic, there was demand for “Environmental, Social and Governance” (also known as ESG) funds, Morningstar data found. Millennials led the charge for ethical investing, with about one-third of that generation often or exclusively using investments that account for ESG, a CNBC and Harris Poll survey reported.

Investing can be overwhelming — for anybody at any age. It’s yet another reason why firms are creating online content, building apps and working with social media influencers to engage these young newcomers. 

Even when working with brands, viewers should see these videos as just a kickoff. That’s not always easy when people on social media are posting about gaining threefold returns or talking about the latest, hottest stock picks, but it’s imperative to get on the right track financially.

Becoming familiar with the creator is also necessary, Admani added. “It’s important to take it as a starting point,” Admani said.

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