Wealthy millennials have come of age during period of extreme innovation: Expert

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Wealthy millennials are losing faith in the stock market as a way to build wealth a recent bank of america survey found that many are turning to alternative investments to find those returns here with more on that is jeff bosconi bank of america head of private bank services jeff welcome back to the show so talk about the divergence and what we’re seeing between some

Younger investors and older millennials sure and and thank you thanks for having me it’s great to be here with you again um yeah so so we did find in our survey some generational differences emerging in in particular 75 of younger investors who are part of our survey indicated that they don’t believe uh a traditional portfolio of stocks and bonds will generate above

Average returns uh over time and into the future uh so that was really one of the major findings we also found that younger investors were more inclined to have sustainable investment products in their portfolios and also wanting to have have an impact through philanthropy with their wealth jeff you mentioned the fact that uh this group of individuals is favoring

Alternative investment or really finding a reason to invest there i guess what do you think is driving that lack of confidence when it comes to stocks and bonds i think i would point to a couple of factors first you have to remember where we’re coming from from a market standpoint we’ve come through a fairly prolonged period of strong performance at the equity

And bond markets and of course this year we’ve had considerably more volatility so that may be causing some investors to think about investments outside of traditional investments i also think uh the alternative investment universe universe continues to evolve uh there’s more and more access to alternative investments through platforms like ours here at bank of

America and as access grows interest may also be increasing remember this was historically the domain of institutions and endowments the last thing i would point to is remember that this generation uh has really come of age during a period of extreme innovation and so there may be a greater willingness here in this generation to to embrace uh newer asset classes in

In different different products they’re also coming of a age at a time where crypto and nfts have absolutely crashed in particular nfts has that shied them forced them to shy away from some of those digital assets you know what we see uh around digital and and this was picked up in the survey as well uh there’s a lot of innovation and development happening happening

In that space time will tell how it all plays out uh within our client base uh our conversations are focused most mostly on education people want to learn more about the ecosystem they they want to understand what it is how it works and jeff i thought it was interesting as we as you had that crypto question in this study looking at the discrepancy between those who

Were who thought they understood crypto well and whether they thought it would actually pay off as a longer term investment break down some of that for us sure again i think what you’re starting to see uh in in the survey again is generational differences among investors and as i just said you know the younger investors call it age 20 to 40. they’ve they’ve come

Of age in a period of just extreme innovation so they may be willing to embrace uh newer asset classes non-conventional uh forms of investment to a degree that maybe we haven’t seen in in prior generations again i think i think time will tell when it when it comes to to crypto and certainly uh the current current market environment is is playing into the mindset

Here around crypto jeff one thing that did stuck out to me stick out to me in this survey was that only half of wealthy parents considered their children well prepared to inherit their fortunes the conversations that you’ve had with clients just the feeling out there why do you think that is look so i i think you put your finger on one of the critical insights

From the survey um we’re all aware of the 84 trillion in in wealth that’s set to transfer here over the next two decades uh and and yet half just half of parents feel that their children are well prepared to inherit that that well for us i think that speaks to a need a continued need around estate planning wealth and wealth and estate planning uh our advisors our

Client teams uh need to really be having comprehensive holistic dialogues with families around around estate planning and it’s not just the documents the legal documents it’s conversations around family dynamics um purpose uh impact uh all of the factors that go into having a really well thought out estate plan and finally we talk a lot about esg investing in this

Space and it’s been a hot topic across the country politically as well statistically what is the survey showing about the drop-off between younger people and those over 43. so what the survey showed is about a quarter of all respondents uh have esg in their portfolios that that 25 or so is driven heavily by this younger cohort of investors uh upwards of 70 of the

Younger investors have have esg in their portfolio so there again you see a divergence between uh the older generation of investors and and the younger generation of investors i think it’s important to point out that uh there was a quarter a quarter of respondents had exposure and that’s double uh the level that it was just four years ago in 2018 uh so this is an

Area that’s growing rapidly uh and that’s an area of focus particularly for younger investors who feel that this is just a smart way to invest it’s not a specific initiative or something separate it’s yet another way to have a positive impact on on the world around them it’s growing rapidly as is the pushback to esg investing as well right thank you jeff bosconi

Good stuff appreciate that

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Wealthy millennials have 'come of age during period of extreme innovation': Expert By Yahoo Finance