Introduction
Only 20% of Gen Z adults say they would turn to a financial advisor for financial guidance, according to Investopedia’s 2025 American Dream Study. The finding highlights a widening gap between the complexity of financial decisions facing younger adults and the channels they use to learn about money.
For Gen Z adults ages 18 to 28 in 2025, financial decisions increasingly involve student debt, housing costs, credit products, retirement savings, investing and employment uncertainty. At the same time, social media, online forums and self-directed research have become major sources of financial information.
The issue is not necessarily that younger consumers reject financial education. Rather, the data suggests that many prefer accessible, digital and self-directed sources over traditional advisory relationships. That shift has implications for banks, fintech companies, financial advisors and regulators seeking to improve financial literacy among younger consumers.
Why Gen Z Financial Advice Is Increasingly Coming From Digital Sources
Investopedia’s study found that only 20% of Gen Z respondents identified financial advisors as their preferred source of financial advice.
By comparison, 50% said they would use short- or long-form video content on social media. Another 23% cited online forums such as Reddit, while 22% said they would turn to books and self-help guides.
The pattern reflects the way younger consumers increasingly access information more broadly. Digital platforms provide immediate access to financial concepts without requiring an appointment, minimum investment balance or long-term relationship with an advisor.
The Consumer Financial Protection Bureau has also identified social media as an increasingly important source of financial information for younger generations. Its research notes that social media can make financial information more accessible, while also creating concerns about accuracy and the qualifications of people providing that information.
This distinction is important. Accessibility does not necessarily establish reliability.
Why Traditional Financial Advice Has Struggled to Reach Gen Z
Several factors help explain the relatively low use of professional financial advice among younger adults.
Cost and minimum asset requirements
Traditional advisory services have historically been structured around investment management. Under an assets-under-management model, fees are generally linked to the size of a client’s portfolio.
That structure can be less relevant to someone who is beginning their career, has limited investable assets or primarily needs help with budgeting, debt or cash-flow management.
FINRA notes that advisory fees can be charged through different structures, including fees based on assets under management, while other investment professionals may receive commissions or other forms of compensation.
Trust in financial institutions
Gen Z entered adulthood after the 2008 financial crisis and amid a period of significant economic disruption. That experience has contributed to skepticism about financial institutions and traditional financial products.
Trust is particularly important because financial advice involves decisions about savings, investments, debt and other long-term financial commitments.
For younger consumers, uncertainty about fees, conflicts of interest and the qualifications of an advisor can become a barrier to seeking professional assistance.
Limited awareness of available services
The perception that financial advice is exclusively for wealthy investors can also narrow access.
Financial professionals may provide services beyond investment management, including financial planning, debt management, retirement planning, tax-related planning and cash-flow analysis. Some organizations also provide free or low-cost financial education and counseling.
The CFPB maintains resources specifically designed to help young adults develop financial knowledge and decision-making skills, including guidance covering earning, saving, planning and borrowing.
How Digital Financial Advice Is Changing the Market
The growth of digital financial advice has created alternatives to the traditional advisor-client relationship.
Robo-advisors
Robo-advisors use algorithms and information supplied by users to provide automated investment management or financial guidance.
Their digital structure can reduce the need for face-to-face meetings and may allow providers to serve customers with smaller portfolios. However, automated systems can have limitations when a person’s circumstances involve multiple financial priorities or complex planning requirements.
Hybrid financial advice
Hybrid models combine automated investment tools with access to human financial professionals.
This approach is increasingly relevant to younger consumers because it combines digital convenience with the ability to address questions that may require individual judgment or additional context.
The broader shift also means financial institutions are competing not only on products but on how financial information is delivered.
The Risks of Relying Entirely on Social Media for Financial Information
Social media has lowered the barrier to accessing financial information, but it also creates quality-control challenges.
Financial content can be simplified to fit short videos, posts or headlines. A strategy that appears appropriate in a general example may not apply to a person’s income, debt obligations, tax position, risk tolerance or financial objectives.
The CFPB has highlighted both sides of the trend. Its research shows that social media can make financial discussions more accessible, but also notes that some financial influencers lack expertise or professional training and that sponsored content can create potential conflicts.
That does not make social media inherently unreliable. It means consumers need to distinguish between general financial education, marketing and individualized professional advice.
What Professional Financial Advice Can Cover
Financial advice is broader than selecting investments.
Depending on the professional and service arrangement, financial planning can involve:
- Budgeting and cash-flow management
- Debt management
- Retirement planning
- Investment allocation
- Education planning
- Tax planning
- Estate planning
- Long-term healthcare planning
- Risk management
This broader scope is particularly relevant for younger adults who may not have substantial investment portfolios but are making decisions that can affect their finances over many years.
The CFPB says financial knowledge and decision-making skills are important for helping young adults evaluate choices involving saving, spending, borrowing and long-term financial goals.
How Much Professional Financial Advice Can Cost
The cost of financial advice depends on the service, provider and fee structure.
According to the figures cited in the original research, investment management through a financial advisor typically costs between 0.5% and 1.5% of assets under management (AUM). Robo-advisor services generally charge lower rates, typically between 0.25% and 0.5% of AUM.
Broader financial planning may instead involve a flat fee of $1,000 to $3,000 or an hourly rate of $150 to $400, depending on the scope of the work.
These figures illustrate why fee structure matters for younger consumers. Someone with a relatively small portfolio may find an asset-based arrangement materially different from an hourly or project-based planning service.
FINRA notes that advisory costs vary according to the services provided and that investors should understand how professionals charge for advice and portfolio management.
How Consumers Can Assess Financial Professionals
Professional credentials alone do not establish whether an advisor is appropriate for a particular client. Registration, disciplinary history, services and fees are also relevant considerations.
In the United States, the Securities and Exchange Commission’s Investment Adviser Public Disclosure database provides information on registered investment advisers, including registration status, Form ADV filings, professional background and certain disciplinary disclosures.
Investor.gov also directs consumers to FINRA’s BrokerCheck for information about brokers and brokerage firms. The SEC recommends researching and verifying investment professionals before engaging their services.
Fee transparency is another important part of the relationship. FINRA identifies several potential compensation structures, including advisory fees, commissions, markups and other charges depending on the financial product and service.
For Gen Z, the challenge is therefore not simply finding an advisor. It is understanding what service is being provided, how the professional is compensated and what regulatory framework applies.
What the Shift Means for Banks, Fintechs and Advisors
The 20% figure points to a changing distribution model for financial education and advice.
Traditional financial institutions have historically relied on branches, financial professionals and established advisory relationships. Younger consumers are more accustomed to receiving information through smartphones, online platforms and on-demand digital services.
That creates an opening for banks and fintech companies to develop financial education and planning tools that are easier to access without eliminating human expertise.
Advisors are also adapting through digital communication, educational content and alternative fee structures. Hourly, subscription and project-based services can potentially address consumers who do not have enough assets for traditional investment-management arrangements.
The regulatory challenge is maintaining a distinction between education and personalized advice while ensuring that consumers can identify credible providers.
Risks and Limitations
The 20% figure should not be interpreted as evidence that Gen Z does not care about financial planning.
The Investopedia study measures where respondents say they seek financial advice, rather than whether they are financially literate or whether they ultimately make effective financial decisions.
There are also important differences among individuals within the same generation. Income, education, employment status, debt levels, family circumstances and access to financial services can materially influence how someone obtains financial information.
Social media itself is not necessarily harmful. It can introduce younger consumers to concepts such as budgeting, saving and investing that they may not encounter elsewhere. The principal limitation is that general content cannot necessarily account for every individual’s circumstances.
Future Outlook for Gen Z Financial Advice
The financial advice market is likely to remain increasingly digital as younger consumers become a larger share of the adult financial-services market.
The more significant structural question is how traditional advisory firms, banks and fintech companies respond to consumers who expect financial information to be accessible online, transparent and available at lower cost.
Automated investment platforms, hybrid advisory services and digital financial education are likely to remain important components of that market. At the same time, complex financial decisions will continue to require information that automated systems and short-form social media content may not fully capture.
For regulators and financial institutions, improving financial literacy will therefore involve both expanding access to information and helping consumers distinguish credible financial education from promotional or unsuitable content.
Conclusion
Gen Z’s relatively low use of professional financial advisors reflects a broader transformation in how younger adults access financial information. Investopedia’s 2025 American Dream Study found that only 20% of Gen Z respondents would turn to financial advisors, while larger shares preferred social media videos, online forums and self-directed resources.
The shift presents both opportunities and challenges for the financial-services industry. Digital platforms can make financial education more accessible, but social media content can also be incomplete, promotional or inaccurate.
For banks, fintech companies and financial advisors, the data points toward a market in which accessibility, transparency, digital delivery and flexible service models increasingly shape how younger consumers engage with financial guidance.
