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December 11, 2015 at 07:20 AM
North American millennials born into ultra-wealthy families want to do good, are more financially conservative than their parents’ generation and more focused on wealth preservation, and consider assistance with wealth transfer the most important guidance their advisors can provide, according to a new study.
OppenheimerFunds and Campden Research surveyed 32 millennials whose family’s net worth was between $25 million and $1 billion, and whose individual net worth ranged from less than $25 million to $500 million. Half the respondents were female, 42% male and 8% unidentified.
Millennials in the study viewed their wealth as a means to advance favored causes that reflected their values. Ninety-six percent reported that they were involved in philanthropy — in part, the study suggested, because of their families’ existing charitable activities.
Seventy percent expressed interest in social and responsible investing, and 64% in impact investing. Many saw their commitment to these strategies as an extension of values their families had imparted, the study said.
Only 9% considered the “feel-good factor” as very important in assessing impact and values-based investment practices. The vast majority of respondents said results were important.
They looked for sustainable, long-term returns, and expected accountability from the managers of their assets.
Fifty-eight percent cited education as their main interest, 39% named environment, another 39% said water and 30% cited gender equality.
Millennials and Their Families
The study found ultra-high-net-worth millennials who came of age during the financial crisis more financially conservative and risk averse than Gen Xers and boomers.
They evinced deep attachment to their families, especially their parents.
Eighty-eight percent said preservation of the family’s wealth was important or very important, and 89% emphasized growing that wealth. Ninety-four percent considered stewardship of the family’s legacy important.
In another finding that reflected millennials’ focus on preserving both family wealth and its legacy, 75% of respondents — with and without children — said they planned to allocate half or more to the inheritance that would be left for the next generation.
The study identified a disconnect between current family portfolio allocations and “ideal” ones that would devote more resources to values-based investing strategies and opportunities.
