Money Matters - May - 2022

Passing the Investment Torch: Generational Investing

It’s an honor for me when my clients refer their children to me. Jason Albert has been my client since 2014. Throughout the years, his family has experienced major transitions. He has moved three times; to Europe and returned to the US. Now, he is 55 years old and preparing for retirement. Jason called me last week and reflected on our relationship, “Having you as a financial advisor helped me stay on top of my finances through so many challenges. Can you also work with my son? He is nineteen and has just started his first real job. Should he open a Roth?” Of course, I replied. Jason’s son, Matthew, is positioned to grow his net worth quickly. Upon talking to him, in addition to opening a Roth, Matthew was anxious to start a private investment account where I would help him manage individual equity positions.

Gen Zs are prime targets for do-it-yourself investing apps. For a decade, we’ve seen discount brokerage firms, such as Fidelity and Schwab, be replaced by investment apps like Robin Hood. While the two discount firms evolved into full-service investment firms targeting higher net worth investors, discount investment apps target younger investors who will go through market cycles and feel the pain of self-investing.

Investment apps pose several risks to young investors. First, there is a lack of fiduciary guidance. No one guides these first-time investors on industry trends or fundamentals regarding investment selection. Second, there is no accountability by the investment app company when things go wrong. Third, with limited investment experience, young investors buy and sell at the wrong time, having little knowledge about the psychology of investing or understanding their risk tolerance. Therefore, they are unaware of the investment biases baked into their portfolios.

Aleks Vickovich, the Wealth Editor for the Australian Financial Report, wrote an article titled, “Gen Z, Millennial Demand for Financial Advice Surges.” He reported, “The number of Generation Z investors receiving professional advice from financial planners or stockbrokers has tripled, and the number of Millennial clients has doubled.” The finding comes as regulators expressed concerns about social media influencers giving unlicensed advice and fueling a “herd mentality” among the new generation of investors.

According to Vickovich, high advisory fees have been a deterrent for Gen Z investors. He stated that increasing regulations has also increased the price of financial advice. Fortunately for my client, fees have dipped significantly – lower than the 3% range his son was quoted.

Because of my existing business relationship with his father, Matthew will have no minimum required investment. He will be able to start a professionally managed retirement account and individual investment account.

If you are an individual investor with a child starting their investment plans, it’s worth having them work with your advisor from the beginning. However, contact me if you don’t have an advisor or would like a second opinion on your investment portfolio allocation. I would love to work with you and your family.

Finally, reach out to me if you would like to talk about current affairs and how to position your portfolio in today’s economy. If you already have an investment advisor, congratulations. However, if you’d like to learn more about what investment advisors do for their clients, please feel free to reach out to me at for an individual assessment.

About the Author 

Edward Vela is an Investment Advisor and Estate Planning Specialist at empiriKal partners, llc©, with 13 years of wealth management experience. He earned a Journalism Certification from the University of Massachusetts, a BA in Political Science, a Financial Planning Certification at UCLA, and an MBA from the UCLA Anderson School of Management. You can contact Edward at 925-300-8805 or email

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