Behavioural finance is increasing in importance. How will the advice industry respond?

The next phase of financial advice is unlikely to be won on technical knowledge alone. It will be won on engagement, behaviour and delivery. Younger Australians, especially Gen Z, are increasingly learning about money through digital channels that are fast, social and highly influential, but often unreliable. ASIC’s 2026 Gen Z study found 63% of Gen Z use social media for financial information, 30% use YouTube and 18% use AI platforms. More concerningly, 56% said they trust financial information on social media, 52% trust finfluencers and 64% trust AI platforms for money guidance. (ASIC)

That matters because the issue is no longer just financial literacy in the traditional sense. It is financial behaviour under digital influence. ASIC’s Moneysmart research for 2025 found that while 52% of Australians set a financial goal, only 12% manage to stick to it. Gen Z were the most likely to set goals at 77%, yet 89% expected challenges, including financial constraints, lack of motivation, lack of knowledge and lack of time. This is classic behavioural finance territory: intention is present, but follow-through is weak. (ASIC)

The broader stress backdrop is also real. ASIC’s 2024 Gen Z research found 87% of young women and 77% of young men reported stress about cost of living. 57% of young women and 41% of young men said they feel overwhelmed by finances, while 47% of young women and 38% of young men said they do not know where to start. These are not just knowledge gaps. They are engagement, confidence and behaviour gaps. (ASIC)

This is where behavioural-led delivery systems become more important for the advice industry. The OECD has argued that behavioural insights can materially improve financial literacy and investor education initiatives by helping people translate information into action rather than simply increasing knowledge. That distinction matters. In practice, the next generation is less likely to engage with long-form static guidance and more likely to respond to mobile-first prompts, simple actions, repeated nudges, progress tracking and content delivered in context. (OECD)

The Australian policy direction already points the same way. The National Financial Capability Strategy identifies young Australians as the first target cohort and explicitly says small positive changes in behaviours such as budgeting, spending restraint, saving and credit habits can improve financial wellbeing. ASIC’s recent Moneysmart refresh also makes clear that trusted public guidance now needs to be more accessible, practical and relevant to how younger Australians actually consume information online. (Moneysmart)

For the advice profession, the implication is significant. If younger Australians are forming money habits through TikTok, Instagram, YouTube and AI, then traditional advice models risk arriving too late. The industry needs a stronger engagement layer that sits upstream from comprehensive advice: educational, behavioural and digitally native. That does not mean replacing advisers. It means building better pathways into advice by meeting people earlier, with simpler tools, clearer actions and trusted guidance that can compete with algorithm-driven content. Recent FSC-backed research suggests digital advice can help fill this access gap, with 42% of Australians who have never had advice seeing value in digital advice tools, and 56% of those with an ongoing adviser relationship also seeing value in them alongside human advice. (fsc.org.au)

That is also why Digital Behaviour Education is commercially and strategically relevant. Its purpose is to improve financial capability outcomes through mobile-first, behaviour-oriented education tailored to how younger Australians actually learn, engage and make decisions. The concept is not to replace advisers, accountants, employers or government resources, but to create the missing engagement and behaviour layer between generic public information and formal personal advice. The gap is not the total absence of information; it is the lack of action-based, early-stage support that helps people turn trusted information into practical habits and better financial decisions.

In that sense, the opportunity for the broader advice industry is clear. Behavioural finance should no longer sit only inside portfolio theory, risk profiling or client decision coaching for affluent households. It now needs to shape how the profession attracts, educates and develops the next generation of clients. If Australia wants to arrest the drift toward weaker financial capability, rising digital misinformation and lower trust in formal guidance, the answer is unlikely to be more static content alone. The answer is more likely to be a combination of trusted information, better behavioural design, digital delivery and earlier engagement. That is where advice businesses, AFSLs and adjacent education models may find their next real growth lever. (ASIC)