Wealth managers and investment houses must be prepared for a shift in investor attitudes as a result of the upcoming ‘great wealth transfer’, an industry commentator has said.
Anand Sambasivan, chief executive of investment platform PrimaryBid, said that with millennials about to receive the “biggest inheritance ever” as a generation, it was crucial that companies understood the values driving this generation and “adjust their investment behaviour and offerings accordingly”.
This is because young people are increasingly demanding cleaner, greener investment portfolios and ways of money management that operate around environmental, social and governance principles.
As they are expected to participate in the greatest transfer of wealth between generations the western world has ever seen, they will be putting more pressure on their advisers and those managing their money to do so along ESG lines.
Some reports have suggested £5trn globally is expected to be handed down to the next generation over the next few years.
In the UK alone, Brooks Macdonald’s research has estimated that at least £327bn is set to be passed on from baby boomers to around 300,000 younger potential clients over the next decade.
Mr Sambasivan commented: “We are seeing a paradigm shift in the way in which the next generation thinks about investment and returns. They are not just after monetary gains but also the overall social cost of their investment decisions.
“Millennials are interested in using investment as a vehicle to produce wealth and a positive impact to society. This is different to traditional thinking and is already playing out in the form of ESG, CSR and impact investing initiatives.”
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