How generational investment aspirations have shifted

With all this having come after 18 months of campaigning by Greta Thunberg and her Fridays for Future movement, it’s not a surprise that this increased awareness of sustainability issues has found itself reflected in investment decisions.

According to Rogers, this rising social consciousness has been “powerfully combined” with an increasing urgency to tackle the climate and ecological crisis.  

We have made previously unimaginable changes to our lives in the last eighteen months.Lily Morris

She says: “Many investors are now asking how they can be part of the solution - investing in businesses that can accelerate the transition to a sustainable and fairer economic system, and avoiding harm.”

Rogers says that many of her younger clients are keen adopters of sustainable investment approaches.

For these investors, social impact investment presents the opportunity to target positive social outcomes and financial return. Rogers adds: “They are excited about the opportunity to use their savings to drive change.” 

And there are plenty of opportunities, says Gavin Jobson-Wood, specialist business development manager for Scottish Widows.

He comments: "The increased public scrutiny on large corporations has led to a wave of climate targets and the creation of ‘green funds’.

"Finally there is a large investable universe of companies with credible targets to decarbonise and, to a certain extent, the current swell in demand can be seen as reflecting previously unmet appetite for investing in these sorts of vehicles."

Generation Z investment trends 

Some commentators believe investment trends may evolve in line with generations; for example, social media platforms have started to encroach into the world of (unauthorised) financial advice in recent years. 

Discussing Generation Z investment trends, Chan says: “Worryingly, many youngsters rely on social media platforms like TikTok or Instagram for investment advice, and are likely to fall victim to scams.

“Generally speaking, they are naive about investing - understandable given their age and lack of experience - and there is a lot of interest in cryptocurrency in this generation.

“This is despite the Financial Conduct Authority’s repeated warnings, as youngsters feel crypto is an easy way to make money without really understanding the risks.”

Informing Gen Z of financial risks and scams will be necessary to prevent miseducation among this generation. 

Jobson-Wood thinks it might be too early yet to "draw conclusions about their investment behaviour", however, although he too believes the pandemic has encouraged more risky behaviours when it comes to trend-following.

He says: "They have been starting to invest over the course of the pandemic, with the much-covered GameStop investment hype at the start of this year being fuelled at least partly by members of Generation Z looking for something to fill their time while quarantining.