In Focus: Intergenerational Wealth  

How generational investment aspirations have shifted

  • To understand how Covid-19 has shaped younger people's investment plans
  • To be able to explain the risks and opportunities of investing sustainably
  • To be able to ascertain the priorities of younger investors

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.” 

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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. 

"It’s arguably never been easier to make major investment mistakes very quickly – for example the relative ease of retail investing and access to crypto-currencies.

"We should strive as an industry, therefore, to ensure that opportunities for advice are made accessible and non-intimidating to those with little investing experience."

This then begs the question – is there a link between the great wealth transfer, investment opportunities for young people, and the need for advice and engagement?

Tim Morris believes so. “There is undoubtedly a link. Where we discuss inheritance with clients and involve their children, they certainly seem more engaged with how money is invested when ESG factors are discussed. And they may even raise this themselves on many occasions", he says.