3 investing lessons to teach your children as Gen Z enters the market at an earlier age

A new investment landscape is opening up, led primarily by Gen Z – those born between 1997 and 2012.

Fewer financial safety nets, high global unemployment, and a more uncertain future than their parents likely faced have created almost unprecedented challenges for young people as they navigate their individual financial futures.

This, along with easy and instant access to sophisticated technology, gives these young people both the drive and the means to begin investing.

According to the Guardian, almost 30% of Gen Z began putting money into investment markets in early adulthood, compared to 15% of millennials and 9% of Gen X.

While this is a generally positive trend, there is also more of a likelihood that this cohort of investors will rely on high-risk options such as cryptocurrency and take a short-term approach to investing. They are also more likely to seek online advice, as they often won’t have the assets needed to work with a financial planner.

An entrepreneurial spirit is to be admired and encouraged. However, there are some key lessons you can teach your children to help them maximise their investments.

1. Explain that high-risk investments (like crypto) are not for everyone

The appeal of cryptocurrency is apparent. A relatively new technology which can offer potentially much higher returns than more traditional investments will understandably appeal to the younger generations.

Research from a leading online trading broker, reported by Coventry Observer, found that half of Gen Z invest in cryptocurrency, while their millennial predecessors tend to place a higher focus on ethical investing.

While you don’t need to tell your children to avoid cryptocurrency altogether, it is a good idea to make them fully aware of the potential dangers of this asset.

It is currently largely unregulated in the UK, although plans are in place for it to fall into the regulatory remit of the Financial Conduct Authority (FCA), which is expected by October 2027.

This means there is currently a lack of protection if they fall victim to a scam, and they are very unlikely to get their money back.

Tax is also a consideration, with Capital Gains Tax (CGT) applicable on sales or trades of cryptocurrency – a factor many young people could be unaware of.

Educating your children about using only mainstream platforms and gaining a full understanding of the tech behind cryptocurrency, can all help them put good checks and balances in place.

Ultimately, the FCA urges you not to invest in cryptocurrency unless you’re prepared to lose all your money, and this is a key take-home message for your children.

2. Emphasise the importance of a long-term approach

Many Gen Z investors rely heavily on financial influencers, or “finfluencers”, for their investment knowledge. A study carried out by Research in Finance discovered that out of the four generations of Boomers, Gen X, Millennials, and Gen Z, the latter group are the most likely to turn to finfluencers for information to guide them through their investment journey.

While some of these are legitimate, others are paid to promote financial products and services. Research in Finance also cites some of the findings of FCA scrutiny, which discovered that finfluencers can oversimplify risk, promise unrealistic returns, and advertise unregulated products.

For a generation accustomed to instant-access, bite-sized content, the appeal is clear. However, this type of short-term approach to investment is unlikely to be sustainable.

The quick gains and big wins from day trading could quickly turn into significant losses.

Explain to your children that the most successful investing is that taken over the long term, with steady growth and realistic returns offering a much more maintainable approach to wealth management.

This means regular, sustainable investment, including approaches such as maximising ISA allowances each year for tax-efficient, incremental growth.

3. Talk to them about the common signs of an investment scam

Unfortunately, investment scams are becoming increasingly prevalent, with City of London Police reporting that victims of investment fraud lost an average of £1,675 every minute last year.

Educating your children about the common signs of an investment scam could help them to be more cautious before jumping feet first into an investment.

These include:

Don’t be fooled by rash promises

Finfluencers promising get-rich-quick schemes and impossible returns are likely to be unqualified and unregulated.

Don’t fall for high-pressure tactics

Scammers often pressurise for a fast decision to be made, so teach your children that under these circumstances, they can walk away and research the offer more thoroughly before making any decisions.

Beware of unexpected or unsolicited contact

WhatsApp messages or direct messages through Instagram or other social media offering bespoke investment tips are generally suspicious and best ignored and deleted.

Don’t be too trusting

Many scams are highly sophisticated and it can be difficult to know if you’re dealing with a fraudster. Encourage your child to check all potential investment companies with the FCA’s Financial Services Register as a matter of course.

Your children might benefit from financial advice in the future

Talking to your children about the value of financial advice is a great way to help them understand more about the complexities of wealth management.

Explain to them the highly individualised nature of financial planning, how it works alongside them to support their aims and aspirations, and how a financial planner can help them make investment decisions that align with their ambitions.

Encouraging them to seek regulated professional support when they’re older will help them to understand the transient nature of the quick wins and the importance of long-term, sustainable planning.

Get in touch

Ardent can support your whole family with their financial planning.

Please contact us at hello@ardentuk.com or call or WhatsApp us on 01904 655 330. As an award-winning financial advice company with advisers included in the 2025 VouchedFor Top Rated guide, we can assure you that we’re a bona fide company providing excellent advice and high-quality service.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Cryptoassets may not be regulated financial products so please be aware that trading them carries a considerable amount of risk for your capital. Cryptocurrencies are also not covered by existing consumer protection laws and are not suitable for the majority of investors.

The Financial Conduct Authority does not regulate tax planning.