Confidence is under pressure as the wealth transfer complicates finances.
As trillions of dollars are transferred between generations those set to inherit much of it are showing the weakest financial footing, warns a new report.
Millennials and Gen Zs are expected to see the bulk of the Great Wealth Transfer, but report struggling with money and long-term financial planning, according to a new report from The Guardian Life Insurance Company of America.
Financial health ratings are at their lowest point since 2016 with just 29% of Gen Z and 31% of Millennials describing their financial health as strong. And despite having more experience with finances, Gen X fares slightly worse at 27%.
It’s long-term planning that is particularly shaky with fewer than one third of Gen Z and Millennials saying they are good at creating and sticking to a financial strategy. Even among high-net-worth individuals with over $1 million in investable assets, half admit to panicking when markets turn volatile, and nearly 40% are not confident in their ability to maintain a plan.
Women, who are projected to inherit an estimated $40 trillion, still trail men in financial confidence with just 26% of women saying their financial health is good compared to 33% of men. Fewer women feel they are saving enough for retirement (49% versus 62% of men), and they are more likely to favor lower-risk investments.
However, most respondents are reluctant to seek expert help with only four in ten currently working with a financial professional, and the numbers are even lower among Gen Z. Instead, many rely on friends or family members for advice—choices that could leave them unprepared for managing complex inheritances.
The research also shows that those who do work with professionals are four times more likely to rate their financial health highly, are better positioned with emergency savings, more likely to own protective products like insurance and annuities and generally feel more confident about meeting long-term goals.
“As Millennials and Gen Z amass wealth, their path ahead is uncharted. Whether using funds to start their own business, buy property, support philanthropic causes, or prepare for a meaningful retirement, a financial professional can provide holistic strategies to best manage, grow, and protect their wealth,” said Mike Perry, head of Client Solutions and Wealth Management at Guardian. “It’s a unique moment for the financial professional industry to build lasting relationships with the next generation of wealth recipients and secure their legacy.”
