Millennials, also known as Generation Y, are the generation born between the early 1980s to mid-1990s or early-2000s. Asset managers do think of Millennials a bit. Differently, they’re the world’s most powerful consumers, endless selfies with avocado toast and poised to inherit the earth.
It is assumed that over the next 30 years, $30trn (£23trn) of assets will belong to the millennials, and around the third of that over the next decade. Maybe soon enough, fondness to avocado toast might not be the only thing to define the millennials. Words like ‘driven’, ‘entrepreneurial ‘, ‘richer’, ‘more educated’ will suit them too. The oldest millennials are of 38 years old currently, soon enough they’re going to inherit the properties and assets of their parents shortly. Adding more to that, an average human being plans of investing between the age of 45 to 55, our millennials are reaching their soon enough, which will eventually make them first generations of digital natives.
Getting to the Roots
The assets managers are paying more attention to the millennials, already framing strategies considering their importance in the next decade. A majority of this generation, around 80% advocates and interested in investing in responsible factors like the incorporation of environmental, social and governance (ESG) factors into stock selection. Comparing with previous generations, they’re more interested and involved in these sorts of issues. The research also states that their decision making was distracted by insufficient information and education on responsible investing.
What should one do?
A low level of standardization when it comes to ESG affects the investment; it is still unclear how the ESG performance will be measured and analyzed, how training is structured. A greater understanding of millennials is still required.
A framework to understand ESG properly should be created, adding more to this, a framework of how ESG performance will be displayed and indicated should be made clear.
Meanwhile, asset managers are set to serve the millennials as investment managers of tomorrow. That means promoting and expanding ESG- focused funds will be the priority, which will eventually give rise to many investment strategies.
Last but not least, education will be required that why responsible investment gives better and trusted outcomes. Technology can be developed to provide ESG at a glance shortly.
Targeting a generation
Millennials are engaged and deeply interested in climate change concerns, they’re outraged by fake corporates and unfairness on social levels. They give priority and importance to a firm’s ethics in decision-making processes.
They think that investing is a way to express their deep beliefs regarding social, environmental and political ethics. Responsible investing is not just a feature of the near future but an essential requirement and a far important strategy. Millennials are the strongest aspect of the near future of the corporate and investment sector. Asset managers are already set and prepared to serve them. Strategies are forming, ESG factors are improving considering the next decade when the millennial generation will hit the investment sector.