Half of parents say their teen knows more about cryptocurrency than they do
SAN FRANCISCO--(BUSINESS WIRE)--
While parents are the main source of education about finances for their kids, a surprising number of teens are turning to social media for financial lessons. According to a recent Wells Fargo & Company survey of parents and teenagers, over half of teens (57%) say they learned about handling finances from their parents. But they are also likely to learn financial lessons from other sources, including school (47%), social media (35%), and online websites and articles (34%). Parents underestimate how much their kids are learning from social media. Only 12% of parents believe their teens use social media for financial education.
Financial documents. (Photo: Wells Fargo)
“There is a bit of a disconnection between parents’ and kids’ perceptions around financial education,” said Kathleen Malone, financial advisor with Wells Fargo Advisors in Charlotte, North Carolina. “While 61% of parents polled say they’re talking to their kids about finances, only 43% of teens report they have had these conversations. It’s very important for families to discuss money — and for our next generation to understand how to handle their finances.”
The Wells Fargo Parent-Teen Study on investing included 318 teens between the ages of 13 and 17, and 304 parents of teens who are 13 to 17.
Investment knowledge lacking
The survey found common ground between parents and teens in the importance of learning about finances and investing. Almost all teens and parents (93% teens, 92% parents) agree that teens who learn about investing will be better off financially later in life. However, nearly half of the teens (49%) and nearly one in three parents (32%) give themselves a D or F grade in investment knowledge. Teen girls (53%) rated themselves lower in investment knowledge than boys (42%).
“The good news here is that three out of four (75%) teens say they are ready to learn about investing, and nearly nine in ten (87%) parents believe their teenaged children are ready for it, too,” said Malone. “What’s more, I’m thrilled to see the next generation demonstrate such enthusiasm and desire to hone their investing acumen.”
Parents and kids are also in agreement on how well teens handle money. Nearly seven in ten (69%) teenagers believe they are good with money, and their parents (72%) agree. Four out of five (81%) parents believe they are good financial role models for their kids, and 84% of teens agree.
Social media a catalyst
In January, many teenagers took note of the ‘short squeeze’ frenzy, partly driven by a concerted effort on social media.
Almost half (45%) of teens said they were more interested in investing this year because of the GameStop social media situation. More teen boys than teen girls reported increased investing interest due to GameStop (53% vs. 40% teen girls).
When it comes to cryptocurrency, many parents admit that their teens are quite knowledgeable. Half of the parents (50%) said their teen knows more about Bitcoin than they do. And the teens agree. Almost half (45%) of teens feel they know more than their parents about Bitcoin. Teen boys are more likely to say they know more than their parents about Bitcoin (58% teen boys vs. 33% teen girls).
“Social media has a profound influence on our younger generations. Those generations grew up with social media and often trust many of the platforms more than their parents do,” says Mariana Martinez, family dynamics consultant with Wells Fargo’s Wealth & Investment Management group. “It is vital to establish solid and open communication, create a shared purpose, and educate our children so that they are prepared for financial independence.”
The money talk
While three in five (61%) parents say they have had conversations with teens about handling finances, only 32% say they have talked much about investing. Nearly nine in ten parents (89%) wish their parents taught them more about investments growing up. Almost all parents (98%) and teens (95%) think it is important that high schools teach students about the basics of handling finances, including investing.
Beyond talking to their teen about investing, more than a quarter (29%) of parents say they have promoted one or more of the following educational activities to help their teen learn more about investing:
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17% opened a custodial account and invested on their teen’s behalf
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13% encouraged their teen to play a simulated stock market game that allows them to learn about the market without investing actual money
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7% gifted stocks to their teen so they can follow and learn about the market
While more than a quarter of the parents polled say they have done one of these things to help their teen learn about investing, some teens may not be paying attention to the efforts. Only one in five teens (20%) say their parents have engaged with them on any of these activities.
“Financial education is important, and so is a deeper understanding of how Wall Street works,” said Malone. “There are many great resources for families to learn and understand together how to manage their money, and this survey shows our kids are ready to learn more about investing.”
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• Subject to Investment Risks, Including Possible Loss of the Principal Amount Invested
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Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.
About the Survey
Versta Research conducted a national online survey of 622 parents and teens on behalf of Wells Fargo & Company. The survey included 318 teens between the ages of 13 and 17, and 304 parents of teens who are 13 to 17. Sampling of both groups was stratified by gender, race/ethnicity, and household income, and then weighted to current population estimates from the U.S. Census Bureau of persons in households with teens age 13 to 17. The survey was conducted from April 20 to May 3, 2021. Assuming no sample bias, the maximum margin of sampling error among both teens and parents is ±6%.
About Wells Fargo Wealth & Investment Management
Wells Fargo Wealth & Investment Management (WIM) is a division within Wells Fargo & Company. WIM provides financial products and services through various bank and brokerage affiliates of Wells Fargo & Company and is one of the largest wealth managers in the U.S., with nearly $2 trillion in client assets. WIM serves clients through the following businesses: Wells Fargo Private Bank serves high-net-worth individuals and families; Abbot Downing serves ultra-high-net-worth individuals and families; Wells Fargo Advisors provides advice and guidance to help clients maximize all aspects of their financial lives; and Wells Fargo Asset Management brings together a strategic balance of investment capabilities to serve the investment needs of institutions, financial advisors, and individuals worldwide. Through Wells Fargo Private Bank and Abbot Downing, WIM is also a leading provider of trust, investment, and fiduciary services, including personal trust services and a number of specialized wealth services designed to meet the diverse needs of high-net-worth clients.
Brokerage services are offered through Wells Fargo Advisors. Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.
Wells Fargo Bank, N.A., offers various advisory and fiduciary products and services including discretionary portfolio management. Wells Fargo affiliates, including financial advisors of Wells Fargo Advisors, a separate non-bank affiliate, may be paid an ongoing or one-time referral fee in relation to clients referred to the bank. The bank is responsible for the day-to-day management of the account and for providing investment advice, investment management services, and wealth management services to clients. The role of the financial advisor with respect to bank products and services is limited to referral and relationship management services.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a leading financial services company that has approximately $1.9 trillion in assets and proudly serves one in three U.S. households and more than 10% of all middle market companies and small businesses in the U.S. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth & Investment Management. Wells Fargo ranked No. 30 on Fortune’s 2020 rankings of America’s largest corporations. In the communities we serve, the company focuses its social impact on building a sustainable, inclusive future for all by supporting housing affordability, small business growth, financial health and a low-carbon economy. News, insights and perspectives from Wells Fargo are also available at Wells Fargo Stories.
Additional information may be found at www.wellsfargo.com | Twitter: @WellsFargo.
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Source: Wells Fargo & Company