Next gen to have a better conscience than their predecessors
Appetite for sustainable investing in the US is moderate at best, but analysts from GlobalData say that, like robo-advice, the offering is ahead of its time and will be key for the next generation.
According to GlobalData’s 2018 Global Wealth Managers Survey, although 90 per cent of US providers interviewed had socially responsible investments in their high net-worth proposition, the demand for those products was moderate at best, sitting at 50.1 per cent (where zero per cent was very weak and 100 per cent was very strong).
A UBS report looked at high net-worth investors with at least one per cent of liquid assets allocated to investments with environment, social and governance factors, and only 12 per cent of high net worth individuals in the US had some sustainable investments in their portfolios.
Sergel Woldemichael, a wealth management analyst at GlobalData, said despite the weak appetite, providers shouldn’t omit sustainable investments in their proposition, as they’ll be key for the next generation.
“As the generational wealth transfer approaches, wealth managers will need to ensure the next generation’s needs are met sooner rather than later, as heirs are likely to start influencing their parents’ investment decision even before the actual wealth transfer,” he said.
“Wealth managers need to adopt or expand their sustainable investments, as demand for these products will only grow.”
AUTHOR
Anastasia Santoreneos
Recommended for you
With regional and rural suburbs exhibiting high spare capacity to invest, Money Management speaks to three regional advisers on the opportunities beyond the major cities and the importance of a strong network.
Platform consolidation is expected to accelerate among financial advisers this year, as software company Finura pinpoints which two platforms are set to be the winners, thanks to this trend.
The software provider has made several appointments in its APAC wealth propositions team, with a focus on driving growth across digital advice, Xplan and strategic partnerships.
The platform has announced it plans to close its Xplore managed discretionary account service in 2026 which holds $2 billion in funds under administration.
