(Bloomberg) — An impending transfer of $73 trillion in wealth to younger generations is drawing attention to the rise of social media as a means of financial advice between Gen Z and millennials, according to a report from the World Economic Forum.
“Finfluencers”, a segment of online influencers who share advice about money and investing on social media are helping to drive the democratization of financial information, a trend that is shaping investment behaviors, the report says. This comes as baby boomers (born 1946 to 1964) and members of the silent generation (born 1928 to 1945) are expected to pass approximately $73 trillion to younger generations by 2045.
The WEF report also noted that by 2030, women are poised to control a significant portion of the $30 trillion held by baby boomers in the US. And while Gen Z and millennials are entering the financial markets earlier than other generations, the financial services industry needs to innovate and adjust the way it gives advice, the WEF said.
Younger generations have more access to financial information, but it's important to distinguish it from tailored financial advice provided by a regulated professional, said Meagan Andrews, head of Capital Markets Initiatives at the World Economic Forum.
“Social media is such a powerful channel to get people interested in personal finance and the financial markets and to make them feel seen,” she said. “But the dangers with disinformation and misinformation are also real.”
Overall, the WEF identified six trends it said are important to the financial advice sector: changing demographics; comprehensive financial wellness goals; the need for accessible digital and highly personalized advice; transparent and fair pricing; and increased reliance on social media.
To contact the author of this story:
Francesca Maglione in New York at (email protected)