Forget Allowances, Most Teens Want to Know How to Invest

Kids these days, am I right? Now more than ever, teens are getting invested in, well, investing. Seven in 10 teens ages 13 to 17 say they are very or extremely interested in building wealth, saving for big purchases and learning about markets, according to a new Charles Schwab survey. Just as many parents say it’s important their children learn the ins and outs of financial planning; however, many of those same parents say teaching their kids to invest is harder than teaching them how to drive. That’s exactly what advisors looking to court the next generation of clients should want to hear. “There’s a genuine appetite for guidance,” said Michaela Jesionowski, a managing director at Schwab. “The key is meeting teens where they are. They’re eager to learn but candid about the gaps in their knowledge. That’s a tremendous opportunity for advisors to step in as a trusted resource and make a real difference early on.” Gen X and millennials entered the workforce during a weird transition period for investment and retirement planning. Pensions were being phased out in favor of 401(k)s, placing the onus of saving on employees rather than employers. Meanwhile, retail trading platforms and online educational resources hadn’t yet become ubiquitous, so plenty of Americans were stumbling around in the dark. But the youth of today are a shining light, with kids not even old enough for a driver’s permit saying they already have some knowledge on how stocks, crypto currencies, mutual funds and ETFs work. The survey also found: - Building money early, paying for college and making a major purchase like a car are among the top motivators for teens want to learn about investing. - There’s also a significant gap between when today’s teens and their parents first became aware of investing. Some 15% of teens said they initially heard of investing at just nine years old, compared to only 1% of parents. - Both parents and teens agree that money management is one of the most important subjects taught in school. (However, many states still don’t require students to take a personal finance course to graduate.) “Investing is becoming a family activity,” Jesionowski told Advisor Upside. “That’s a really encouraging dynamic.” She warned that teens are also bombarded with social media, influencers and finance apps, so it’s up to advisors to help cut out all the noise. “That combination of access, awareness and information is driving teens to take this more seriously, and it’s also why education at this stage is so critical,” she said. The post Forget Allowances, Most Teens Want to Know How to Invest appeared first on The Daily Upside.