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Impact investing looks like the space to watch

As with every new generation, attitudes and preferences change, and millennials are no exception to this rule. Some of this undoubtedly comes from the natural instinct for independence. However, factors such as higher university education rates and access to the wealth of information available for free online have certainly had an effect on the tech-savvy millennials who have grown up with this technology. This is especially obvious when you contrast their lives with the baby-boomers who are currently in the process of transferring their estates to them, many of whom have wholly different penchants when it comes to investing.

This matters because there is around $4 trillion that will be transferred in the US and UK alone, much of which will be going to millennials. Wealth managers want to keep their clients but will likely need to take a new approach to retain the picky beneficiaries. A price-competitive digital delivery will be important with sustainability, clean energy and impact investing playing a leading role. The old guard may need to give way to some fresh-faced managers in their 30s-40s, as the new clients may see their family’s long-standing manager as their parent or grandparent’s wealth manager with an outdated mind-set.

Impact investing is up and coming and an area in which any wealth manager looking to expand their client base should be well versed. The ability to produce social outcomes and simultaneously make a financial return is important to millennials who tend to be more conscious of the social and environmental impact of their activities. The age of low-fee ‘passive’ funds, as well as their ‘smart-beta’ marketed cousins is upon us, enabling anyone with access to the internet to invest in a diversified portfolio. With basic investment advice readily available online, advisors need to be able to sell their expertise and justify the fees to the next cohort of clients. Impact investing looks like the space to watch.

Risk Warnings and Important Information

The value of investments can fall as well as rise.  You may not get back what you invest.
The above article does not take into account the specific goals or requirements of individual users. You should carefully consider the suitability of any strategies along with your financial situation prior to making any decisions on an appropriate strategy.

MASECO LLP trading as MASECO Private Wealth is authorised and regulated by the Financial Conduct Authority, the Financial Conduct Authority does not regulate tax advice.  MASECO Private Wealth is not a tax specialist. We strongly recommend that every client seeks their own tax advice prior to acting on any of the strategies described in this document.


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