How the pandemic is shaping Gen Z and Millennials

Wealth transfer

How will the next generation face the challenges of the new decade and beyond?


COVID-19 has forced many people to adjust how they live and work—and reflect on how they may want to change those activities when the pandemic passes. Values have shifted amid rolling lockdowns, as people reassess their priorities around relationships, health and wellness and careers.

Dr. Eliza Filby, an historian and intergenerational expert, looks at how people’s values and behaviours are changing and the implications for politics, work, consumption, society and economics. Filby has worked with many wealth organizations to help understand the challenges between generations with regard to wealth and succession planning.

Filby sees three areas—education, technology and politics—in which Gen Z (those born between 1997 and the early 2010s) will be greatly shaped by COVID-19. Eventually, she believes these will distinguish them from Millennials (those born between 1981 and 1996).

“Gen Z are digital natives who’ve grown up with the world’s network, market and knowledge in their pocket. Social media is fueling their creativity. This generation learns, communicates and creates in moving images not words,” explains Filby.

Alvin Chiam, a wealth planner at RBC Wealth Management based in Singapore, points out that the exposure Gen Z has to every form of communication would mean they know from the onset the pros, cons and limitations of each communication mode. “Human interaction will be very vital to this group as they know the strengths and weaknesses of social media,” he explains.

A new generation of entrepreneurs

While nearly everyone has been affected by the pandemic, Filby thinks the social implications have been harsher for many Gen Z. Despite the group being best-suited for the rapid transition to digital life during the pandemic, Gen Z has been starved of much-needed social connection over the past year.

They’ve effectively had 12 months of their youth taken from them,” Filby points out. They’ve had their education disrupted. They’ve had their entry into the workplace disrupted and they’ve had their social formations disrupted.”

The result, she believes, could be a generation more accustomed to accelerated societal change and unlikely to follow their Millennial peers when it comes to career and finances.

Filby expects them to invest more in their careers, including the increasingly popular goal of running their own business. Chiam concurs with Filby, adding that members of Gen Z see other avenues for business—they can connect services, be the middleman or find solutions for others who need them.

“For Gen Z, a business does not necessarily mean a physical product that needs to be manufactured and sold. This paradigm shift means that Gen Z sees the possibility to set up more than one business at once, concurrently acting on the ideas they have,” Chiam says.

The rise of global citizens

Growing up with a smartphone has also generated a savvy entrepreneurial spirit in Gen Z. “More than any other generation, a Gen Z’s virtual and real identities are merged and are therefore much more fluid,” Filby points out.

All of this means Gen Z, especially those from high-net-worth backgrounds, are more conscious of their wealth, status and advantage than previous generations, Filby explains. “Many are embracing a more nuanced, and therefore more difficult to understand, notion of how we relate to one another and the need for change. [And] this is coupled with the urgency of climate change; human’s stewardship over the earth is how this generation are defining ‘legacy.’”

Iggy Chong, managing director, head of Private Banking, Greater China at RBC Wealth Management based in Hong Kong, also shares Filby’s views. “Gen Z believes in climate change and action as a result of schooling.” He adds that there is more social awareness among Gen Z where responsible capitalism resonates with this generation a lot more.

“Gen Z is no longer interested in just returns,” adds Chiam. They are more interested in stakeholder involvement.” Caring for the environment is extremely important for this group, he says.

Bridging the generation gap

For family businesses, Filby says they should expect a generation gap in values and approaches. “Deference to history, age or hierarchy are no longer a given, which can be incredibly hard to accept for older generations. One trade-off though is that by listening to Gen Z, you’re effectively eavesdropping on the future. They’ll offer insights into the way the market, operations and values are changing.”

When it comes to legacy planning, Chong doesn’t think the pandemic has changed the landscape. However, he explains “there is definitely more awareness of the interconnectedness of the world, which has an impact on every generation,”

As for Millennials, Chiam sees that particular generation as the one caught in the middle. “They are looking at the stability and the prosperity of the Baby Boomer generation (those born between 1942 to 1965) before them with envy and at the same time, they are concerned about the next generation,”

He sees Gen Z in an environment that is generally more volatile and has fewer opportunities than Millennials had. They are also facing rising inflation.

As such, Chiam says, “Millennials, if anything, are probably stewards. [And] they usually ask themselves how they can act as good stewards of the wealth passed on to them by the Baby Boomers and how best to pass it to the Gen Z.”

What to expect from Gen Z

Filby lists three things she is optimistic about the Gen Z: 

  1. Entrepreneurial spirit, which is more befitting the new world of work and business they’ll be operating in.”
  2. Sophisticated attitude towards technology. They’re not passive spectators when it comes to their screens, she says.
  3. They work together. “They’re less individualistic than older generations,” says Filby. They seek out networks, rely on peer-to-peer reviews and see the collective as the only way to solve the challenges of the world.”

This demographic cohort is also not shackled by boundaries, space and time, notes Chiam. “To them, anything is possible. This energy and freedom that Gen Z has should be something Millennials and Baby Boomers tap into.”

Chong also paints a bright picture ahead for the next generation. “We will see a more responsible set of leaders decades from now, who are generally more aware of global interconnectedness. And [for] this generation, those who will hold leadership positions will be more equipped than ever before.”

The material herein is for informational purposes only and is not directed at, nor intended for distribution to or use by, any person or entity in any country where such distribution or use would be contrary to law or regulation or which would subject Royal Bank of Canada or its subsidiaries or constituent business units (including RBC Wealth Management) to any licensing or registration requirement within such country.

This is not intended to be either a specific offer by any Royal Bank of Canada entity to sell or provide, or a specific invitation to apply for, any particular financial account, product or service. Royal Bank of Canada does not offer accounts, products or services in jurisdictions where it is not permitted to do so, and therefore the RBC Wealth Management business is not available in all countries or markets.

The information contained herein is general in nature and is not intended, and should not be construed, as professional advice or opinion provided to the user, nor as a recommendation of any particular approach. Nothing in this material constitutes legal, accounting or tax advice and you are advised to seek independent legal, tax and accounting advice prior to acting upon anything contained in this material. Interest rates, market conditions, tax and legal rules and other important factors which will be pertinent to your circumstances are subject to change. This material does not purport to be a complete statement of the approaches or steps that may be appropriate for the user, does not take into account the user’s specific investment objectives or risk tolerance and is not intended to be an invitation to effect a securities transaction or to otherwise participate in any investment service.

To the full extent permitted by law neither RBC Wealth Management nor any of its affiliates, nor any other person, accepts any liability whatsoever for any direct or consequential loss arising from any use of this document or the information contained herein. No matter contained in this material may be reproduced or copied by any means without the prior consent of RBC Wealth Management. RBC Wealth Management is the global brand name to describe the wealth management business of the Royal Bank of Canada and its affiliates and branches, including, RBC Investment Services (Asia) Limited, Royal Bank of Canada, Hong Kong Branch, and the Royal Bank of Canada, Singapore Branch. Additional information available upon request.

Royal Bank of Canada is duly established under the Bank Act (Canada), which provides limited liability for shareholders.

® Registered trademark of Royal Bank of Canada. Used under license. RBC Wealth Management is a registered trademark of Royal Bank of Canada. Used under license. Copyright © Royal Bank of Canada 2024. All rights reserved.

Let’s connect

We want to talk about your financial future.

Related articles

How to keep your heirs from arguing over inheritance

Wealth transfer 5 minute read
- How to keep your heirs from arguing over inheritance

Wealth transfer: Preparing the next generation

Wealth transfer 7 minute read
- Wealth transfer: Preparing the next generation

Three tips for succession planning: How to start the conversation with your family

Wealth transfer 4 minute read
- Three tips for succession planning: How to start the conversation with your family