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AboutInvesting PlaybookFaithSocietyPlanet
INVESTING PLAYBOOK
3 Reasons
Millennial Investors Are ImpactInvestors
Beth Braverman
It should be no surprise that millennial investors are poised
to become major adopters of impact investing. From
eschewing cars to putting off marriage, millennials have
always done things a bit differently from their parents. Now
that the oldest millennials, born in the early 1980s, have
grown their personal wealth and are starting to take a more
active role in managing family wealth, they’re making their
mark on the investing space, too.
Having already witnessed multiple cycles of boom and bust,
they’re less likely than previous generations to view
investments as a means of getting rich quick. They tend to be
more cautious—and more thoughtful—about where they put
their money.
All this makes them ideal candidates for bringing the
burgeoning impact investing movement into the mainstream.
According to a 2015 report by the Morgan Stanley Institute
for Sustainable Investing, millennial investors are nearly
twice as likely as others to include socially or
environmentally conscious companies and funds in their
portfolios.
Here are three reasons to expect millennials to become
leaders in impact investing.
1. They’re More Socially and Environmentally Conscious
Than Previous Generations
Since entering adulthood, millennials have shown
themselves to be more interested in the environment and in
social causes than previous generations.
While two-thirds of people polled by Nielsen said that they
would pay more for a sustainable product, that number
jumped to nearly 75% for millennials. Millennials are also
more likely to volunteer or to take a job that pays less if they
feel that they’re making a difference. Now they’re bringing
that awareness—and their willingness to put their money
behind their beliefs—to their investing decisions.
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As millennials grow into leadership roles at �nancial �rms,
they’re advancing the creation of new funds and
organizations with these aims in mind. And millennial
workers in other industries are demanding values-minded
investments options within their 401(k) plans.
2. They Expect Transparency and Are Used to Doing Their
Research
Millennials grew up reading food labels and are used to
researching products before a purchase, so they have no
problem performing due diligence on a company or fund
before investing. Plus, it’s getting easier for them to do so.
Companies typically make their mission statements available
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While more than a quarter of high-net-worth millennials
already own impact investments, another 57% are
interested in adding them, according to a report released by
U.S. Trust. The same study found that the majority of
millennials consider the social, environmental, or political
impact of a fund to be an important factor when making their
investment decisions.
3. They’re about to Have a Lot of Money to Invest
Just as they reach their prime earning years, millennials are
set to receive a collective $30 trillion in assets from their
baby boomer parents in the next few decades, according to
Accenture. Millennials are also likely to take a larger part in
managing family of�ces, putting them in charge of the
direction of family wealth.
As millennial investors come of age, they’re destined to
become leaders in the �nance �eld. As they do, they’ll bring
their generation’s values and habits into the broader
mainstream.
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