Millennial Heirs to Change Investment Landscape

US Trust, a private bank, estimated that $12 trillion worth of assets are slated to change hands in the next decade as money passes from the baby-boomer generation, many of whom became rich by creating companies in the postwar years, to their heirs. This will be the largest transfer of wealth in history, plus an estimated $24 trillion estimated to be bequeathed to spouses and others that are in the same generation over the next 15 years.

But will the recipients have the same goals and expectations as the previous generation? The sense of economic fragility may have changed after the postwar time and the younger Americans seem less driven by the narrow definition of wealth of their elders. US Trust found that 75% of wealthy millennials “consider the social and environmental impact of the companies they invest in to be an important part of investment decision-making,” while two-thirds of them “view their investment decisions as a way to express their social, political, or environmental values.”

Professionals may seem surprised or confused by the shifting priorities, but the truth is that financial advisors should recognize and be aware of what their younger clients are more likely to invest in. Impact investing projects are on the rise, with many avoiding stock that are not associated with social or environmental advancements.

See Gillian Tett, Millennial Heirs to Change Investment Landscape, Financial Times, September 20, 2018.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.