×

CITYOFLONDON PROPERTY OPINION

Thursday February 13 2020

Understanding the rise of the high net worth millennial


Financial advisers therefore need to be ready for the rise of a new client-base with different needs and aims. CEO of Butterfield Mortgages Limited, Alpa Bhakta, explains why...


Alpa Bhakta

ALPA BHAKTA | CEO Butterfield Mortgages Limited




Understanding the rise of the high net worth millennial

“The Bank of Mum and Dad” is a turn of phrase receiving regular airtime at the moment. It refers to the phenomenon of young people, often millennials, turning to their parents in times of financial need. It also has some negative connotations, suggesting a generation that is less conscientious than those who preceded it. 

While this is probably an unfair appraisal of young adults, recent research from EY indicates the use of the parental funds is a global economic trend. It is predicted that over the next 20 years, those born between 1981 and 1996 are set to receive more than $30 trillion from their parents via inheritance in the US alone.

With the entire world economy (gross world product) currently valued at $80 trillion, this amounts to one of the most significant transfers of wealth in human history. 

This trend is already borne out in recent research from Deloitte; by 2020, the total net-worth of millennials worldwide will be more than double what it was in 2015. For those who already have a home, and particularly for high net worth (HNW) individuals and ultra-HNW individuals, inheriting their parents’ assets will likely mean receiving and managing a new investment portfolio consisting of stocks and shares. Financial advisers therefore need to be ready for the rise of a new client-base with different needs and aims.

However, the preconceptions some may have of millennials might be short-sighted. Surprisingly, a huge majority (82%) prefer face-to-face meetings when making important financial decisions. The growth of digital communication is not universal and the research seems to suggest advisers are not likely to spend more time video calling, messaging or emailing their millennial clientele, despite them being a tech savvy generation. Further, it goes without saying that millennials’ foundational investment aim is likely to be the same as their parents and grandparents: achieving the long-term growth of their assets. 

What financial investors need to understand is how the kind of advice they are giving could change, as the investment aims of younger investors are much more likely to focus on so-called environmental, social and governance (ESG) “impact investments”. These are investments that somehow contribute positively to society and the environment. 

Research from Deloitte suggests millennials are unlikely to compromise on the prioritisation of these kinds of assets, with two-thirds of them feeling “obliged” to change the world for the better. Further, they are also unlikely to compromise on these values as they age, as three quarters want to be authentic and not compromise their personal values when investing.

While ESG investments are more specialised, they do not necessarily equate to weaker returns. The best performing three ESG funds all gained more than 16% in the year ending July 2019, while those in the top ten places all grew by at least 10%. This impressive growth could be down to the inherent stability of ESG investments, as they are often geared toward long-term sustainability and good business practice. 

The trends influencing millennial ESG investment can be seen statistically and anecdotally. On the first count, research from EY suggests that almost a fifth of assets now under management worldwide are in climate conscious or sustainable investment].

On the second, one need only look to Steph Stephenson, daughter of investor Ron Cordes and head of the Cordes Foundation. After taking over the foundation a few years ago, the 29-year-old has increased the proportion of the fund’s sustainable investments from 63% to 100%, whilst maintaining impressive annual returns of 8%. 

For those in finance, appealing to millennials and doing the right thing for the future can be achieved through a variety of means. However, one of the main tasks for financial advisers will be preparing and self-educating themselves on the needs of the HNW individuals of the future. That’s exactly why we shouldn’t downplay the priorities and interests of millennial investors, but instead ensure we are ready to meet their demands.



"We shouldnt downplay the priorities and interests of millennial investors, but instead ensure we are ready to meet their demands."
Alpa Bhakta, CEO of Butterfield Mortgages Limited






CITYOFLONDON JOBS



Assistant Property Manager/Administrator (Part Time)

South West London


EA Recruitment have been instructed by our client an independent Estate Agency which has been established over 19 years based in Battersea.




Property Manager

Uxbridge


Property Manager £22,000-£25,000 salary + bonus Property Manager Role: As a Property Manager you will be reporting to the Head of Property Management, you will be responsible for providing a full Property Management service for the landlords.




Property Accounts Assistant

London


A Property Management Business based near Old Street - A Property Accounts Assistant - circa £28kYour new companyA Property company based near Old Street, which have a portfolio of residential and commercial properties the company have a detailed approach to all projects with include quality specification and project management.




Senior Client Accountant - Property Investor / Developer

City Of London


Senior Client Accountant - Property Investor / Developer.




Residential Property Manager

London


A fantastic and reputable company are looking for a property manager to join their team in Central London.




PA - Global Property Company

London


Personal Assistant - supporting the Global Head of HR * £18-£22 per hour (Plus holiday pay) * Award-winning Property company * West End, London * Start Date - Wednesday 14th August 2019 * 4 weeks (likely to be extended) Based in the heart of the West End for an upmarket, Global Property Company with one of the best reputations in the industry.




Property Manager

Stansted


Property Manager Stansted Full Time or Part Time considered at 4 days per week (9am - 3pm) The responsibilities of the role include: Dealing with all maintenance and emergency issues in a timely and efficient mannerAppointment and monitoring of contractorsOrganising quotes for repair/maintenance on behalf of landlords and overseeing worksProviding property management advice within .




Property Administrator

London


A well established London based agency are looking for a Property Administrator to join their team in Central London.




Financial Accountant

Central London


PART-TIME QUALIFIED ACCA or CIMA ACCOUNTANT.




Property Client Accountant

London


Property Client Accountant London, West End £28k-£33k Are you looking to take on a new challenge in an established company with a proven track record, which also offers great benefits and a fair work/ life balance? My client are a thriving international property management company specialising in commercial property, with a head office based in .




Property Accounts Assistant

London


Accounts Assistant (12 month FTC) London £30k-£35k Are you looking to expand your knowledge within the property sector and work client side on a portfolio of commercial properties based in the UK and overseas? My client are an investment company and landlord based in London, who own a prestigious portfolio of properties.




Property Management Client Accounts - 3 days a week

North West London


Client Accounts Manager - Property Management - Boutique Property Agency 25 hours per week (circa) - £25,000 circa per annum WEST HAMPSTEAD PARKING INCLUDED The role involves dealing with all client accounting for a property management portfolio of 70 clients with a total of approximately 200 ASTs, 60 commercial units and circa 20 buildings .




Property Administrator

North London


Property Administrator North London £22000 - £25000 Our client is a highly regarded and successful boutique Property group based in North London.




Intellectual Property Associate

South East London


Our client is a niche boutique law firm without the traditional practices of a stuffy firm.




Property Manager

North West London


The Property Manager will be required to deal with the day to day management of properties within the growing residential portfolio.




Sales Property Negotiator

North London


Sales Property Negotiator£18,000 - £20,000 + Excellent Commission StructureN.




Property Manager

Hounslow


The Property Manager will be required to deal with the day to day management of properties within the growing residential portfolio.




Discover the latest Industry News & Opinions on Entirely














We transform your bright ideas into brilliant digital products.