The findings of the survey are a "wakeup call" for the wealth management industry to seriously rethink how it engages with young Australian adults.

Young Australians often expect to inherit significant sums of money but their money management habits put this at risk, according to research from Findex Group, an accounting and wealth management business.

In its exploration of the spending, saving and investing behaviours of more than 1,000 Australians aged from 18 to 80, Findex found that 43 per cent of Gen Z and 35 per cent of Millennial respondents expect to inherit from their parents or grandparents. Baby Boomers will pass an estimated A$224 billion ($144 billion) each year in inheritance by 2050 – creating a A$3.5 trillion influx of wealth to the younger generations.

“As a society, we are facing one of the largest wealth transfers in modern history. However, what our research shows is the level of financial literacy and responsible money management among younger Australians calls into question whether they have the skills to ensure they are able to pass a similar inheritance on to their own children,” Findex co-CEO Tony Roussos said.

While the younger respondents noted that they “feel confident about managing their finances” (Millennials 43 per cent, Gen Z 35 per cent), “have budgets” (Millennials 72 per cent, Gen Z 51 per cent) and “pay bills on time” (Millennials 96 per cent, Gen Z 93 per cent), this is at odds with other findings where they prefer to “live for today” (Millennials 63 per cent, Gen Z 64 per cent), “spend money over saving for long term” (Millennials 57 per cent, Gen Z 55 per cent) and “have no other investments” (Millennials 55 per cent, Gen Z 60 per cent ).

For those with investments, most younger Australians (Millennials 70 per cent, Gen Z 77 per cent) are prepared to be riskier with their money – cryptocurrencies, for example, are the primary investment choice among Gen Z (42 per cent). 

Shunning advice
The research also showcases a strong resistance to receiving professional financial guidance with less than half (Millennials 44.7 per cent, Gen Z 45 per cent) open to using a financial advisor in the future. Instead, these generations turn to their peers or do their own research.

Most of those surveyed were only willing to pay less than A$500 yearly for a financial advisor, despite the current industry average sitting at A$3,529 per annum.

“This is a wakeup call for the wealth industry to seriously rethink how we engage with younger Australians,” Roussos said.

“With billions on the line, it is also a clear opportunity for financial advisors to better partner with Baby Boomer clients to not only set up the transfer of family wealth but also to work closely with them to empower their kids and grandkids with the crucial, trusted professional advice.”