Older investors flock to AI stocks as Gen Z plays it safe: Wealthtech Weekly

August 11, 2023 4:38 PM

A new study from wealth management software provider Apex Fintech Solutions suggests that the promise of AI is capturing the attention and cash of older investors while Gen Z continues to "wait and see."

The Q2 2023 Apex Next Investor Outlook (ANIO) report looked at investing trends across generations in response to major market-moving triggers, including a looming recession, inflation, riding interest and big tech layoffs.

Among the findings were several signs that investors have left their COVID concerns in the dust — and that the youngest investors among us are looking before they leap.

"What's remarkable about our Q2 ANIO report is how many investing stereotypes were broken," Connor Coughlin, chief commercial officer of fintech at Apex Fintech Solutions, said in a statement. "The multi-generational investing interest in cruise stocks is a great example. But also, despite perceptions around the 'meme stock' generation, it was actually Gen Z that appeared to be more conservative in Q2, even holding back on investing in AI stocks.

"As such, better understanding the changing needs and behaviors of retail investors is going to continue to be critical for advisors and fintechs."

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The ANIO report analyzes the data of investors who traded via the Apex Clearing Platform during the second quarter of 2023. The data includes 1.3 million Gen Z accounts; and 5.6 million accounts held by millennials, Gen X and baby boomers.

Here are some of the big takeaways from the latest ANIO report:

Let's take a trip: Perhaps it had something to do with the summer sun, but investors were hot for cruise lines in Q2. Norwegian Cruise Lines, Carnival and Royal Caribbean saw heavy investments across all generational cohorts, according to Apex.

Carnival collected a record-breaking $7.2 billion in customer deposits in Q2, Royal Caribbean reported bookings were up "at meaningfully higher prices," and Norwegian Cruise Lines exceeded 100% occupancy for the first time since the pandemic.

"The return of cruises seems to signal the end of many travelers' fear of COVID. All four

generations jettisoned biotechnology stock Moderna (MRNA) from their portfolios, a sign that they were looking forward to traveling again," said the Apex study.

Gen Z is less enthusiastic about AI: Millennials and Gen Xers are enthusiastic about AI, with enterprise AI software provider C3.ai shooting up the list of top stocks in those demographics. Boomers doubled down on Palantir, moving it up 24 spots.

"Only Gen Z, usually technology early adopters, decided not to jump on the artificial intelligence bandwagon," the Apex study said, noting no significant movement of AI related stocks among the youngest generation analyzed.

Tech stocks are back across generations: Across all generational cohorts, technology stocks maintain a strong lead in equity investments among these top 10 stocks: Tesla, Apple, Amazon, Nvidia, Microsoft, Meta, Google, AMD, Berkshire Hathaway and SoFi.

Gen Z played it safe in Q2: Gen Zers appeared to scale back in bullish trading patterns compared to Q1. Possible reasons for this cautious approach may include the First Republic Bank crash, negative press surrounding AI from Google and the departure of a prominent figure in the AI industry.

Scroll down to get caught up on other recent fintech news you might have missed in our Wealthtech Weekly recap. And check out the previous edition here.

F2 Strategy sets up shop in Chi Town

West Coast wealthtech consulting and servicers firm F2 Strategy has found a new home in the Midwest.

This week, leaders from F2 announced the establishment of its corporate headquarters in the Chicagoland area. F2 says the move reflects the region's central location and its large concentration of professionals in the financial services, consulting and technology sectors.

F2 co-founders Liz and Doug Fritz have also relocated their family to the Chicagoland area.

"We looked at a lot of options, and after thoughtful consideration, Chicago rose to the top. A key consideration was its centrality to clients and team members alike," F2 CEO Doug Fritz said in a statement. "The area also offers abundant access to exceptional fintech and wealthtech talent, aligning seamlessly with our commitment to expanding and fortifying our business."

Following the acquisition of Oakbrook Solutions in June, F2 Strategy's team has now grown to more than 100 full-time employees who provide consulting and outsourced chief technology officer services to firms collectively managing more than $2.5 trillion in assets.

"While we wholeheartedly embrace and support remote work arrangements, we're equally thrilled about the advantages of a central location in promoting strong connections, training and collaboration among our incredible team," Liz Fritz, chief commercial officer of F2 Strategy, said in a statement. "Chicago offers excellent transportation options and boasts top-notch school systems, further enhancing the quality of life for our employees and their families. This combination of flexibility and a vibrant urban setting makes it an ideal place to attract and retain a diverse, talented workforce."

AdvisorCheck appoints new CEO

AdvisorCheck, a platform that provides investors background data on financial advisors, has announced the appointment of Adriel Tam as CEO.

Tam joins AdvisorCheck from RIA and tax planning firm Viridian Advisors where he served as CEO and co-Founder. Viridian Advisors was acquired by Edelman Financial Engines in 2021. At the time of the acquisition, the firm managed just under $1 billion in AUM.

AIMR Analytics' AdvisorCheck.com displays regulatory disclosures and company profiles for registered advisors through data compiled from FINRA's BrokerCheck, the Securities and Exchange Commission's Investment Adviser Public Disclosure website and the records maintained by six industry certification organizations.

The website, which is free with user registration and draws roughly 50,000 visitors per month, launched on Jan. 2. AIMR Analytics has been developing AdvisorCheck for the past three years, officials previously told Financial Planning.

In addition to the data from BrokerCheck and the SEC database, the site contains details from the organizations respectively overseeing certified financial planners, certified private wealth advisors, chartered life underwriters, certified investment management analysts, chartered financial consultants and accredited investment fiduciaries.

"I am excited to be part of such a talented group of visionaries that want to change the industry that I have spent most of my career in," Tam said in a statement. "We currently are tracking over two thousand visitors a day on our site, and I want to see these numbers significantly increase for the benefit of consumer transparency and advisor advocacy.

"I believe strongly in the value a good financial advisor and their team can add to every investor. Our next round of funding will take us from a proof of concept to a market disruptor. I am thrilled to be joining such incredible people."

Users can search by an advisor's name or go through lists of professionals in any ZIP code by industry designations and years of experience.

The company also recently launched AdvisorCheck+, a tool that allows investors to perform comparison background checks of advisors they are vetting as well as continuous monitoring of the advisor they select for the life of their relationship.

Advisor360° rolls out technology updates

Weston, Massachusetts-based wealth management technology firm Advisor360° has introduced a number of software updates that went live for advisors this month.

The firm's enhanced end client portal now includes features such as real-time account holdings and balances, intra-day change values, client document upload, a configurable dashboard, secure messaging and enriched market data and research.

Advisors can also now create NFS 529 accounts and directly held ABLE accounts entirely within Advisor360°'s digital onboarding capability. Users are able to define 529 investment instructions and fee billing instructions for these registrations.

"At Advisor360°, we have increased the velocity with which we are delivering our new enhancements, and our clients' advisors continue to ask us to help them delight the individual investor," Darren Tedesco, president of Advisor360°, said in a statement.