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Digital era could be driving wealthy millennials' interest in impact investing and philanthropy

Widespread access to digital information and social media could be driving ultra-high net worth millennials to engage more on philanthropy and impact investing, says the author of a new report that is focussed on the next generation’s attitudes to wealth.

Proving Wealth, produced by Campden Research in conjunction with OppenhimerFunds, spoke to individuals born between 1980 and 1995, who came from families ranging in net worth from $35 million to $1 billion.

The report found 96% were interested in philanthropy, 70% were interested in socially responsible investing (SRI), and 64% were interested in impact investing.

Bruce Love, one of the report’s lead researchers, believes millennials’ interest in doing good could be due to the rise of multimedia. “With multimedia, information is right at their finger tips…younger generations are now more aware of the needs around the world that they can be the solution to.”

Education was the top cause the participants in the survey were interested in (58%), followed by environment (39%), water (39%) and gender equality (30%).

When it came to risk appetite, ultra-high net worth (UHNW) millennials take a very conservative approach, similar to their grandparents or great-grandparents of the depression era.

Ned Dane, head of private client group at OppenheimerFunds says the next generation are focused on wealth preservation (important for 88% of respondents) and sustaining their family’s legacy (important for 94% of respondents). He said: “They have a strong desire to preserve wealth for future generations, while creating a lasting and positive impact on the world.”

Love added that major market crises such as the global financial crisis impacted millennials at a very impressionable period of their development. “They’re more conservative because they have mostly lived through the financial crisis, whilst their parents lived in a more financially stable period,” Love said.

Further information revealed in the study showed that a majority of UHNW millennials are involved in committees and boards for the family wealth (59% are on the family’s wealth management board or committee; 59% for philanthropy; 44% for impact investing; and 56% for family governance) but make few long-term strategic decisions. Impact investing was the category where milllennials were most likely to be part of strategic decision making with 31% of participants involved.

“Millennials want to be involved more, they have the knowledge and want to use that, but it’s about the older generation giving them the opportunity,” Love said.

The research also found that the next generation of wealth inheritors seek guidance from financial advisers that have taken time to know them personally and understand their individual and families’ goals on intergenerational wealth transfer.

Twenty five per cent listed the family office executive as their main adviser, while 13% listed their private banker, 13% listed an independent consultant, 6% listed their trust manager, and 6% listed a family business executive.

A total of 32 UHNW millennials took part on an online quantitative survey, and 10 took part on the in-depth qualitative interview in September and October this year.  

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