New Model Adviser - For Professional Investors

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

An Extra Special Generation

An Extra Special Generation

Heraclitus may have said it first, but it’s as true today as it was in ancient Greece: the only thing that is constant is change.

Take the political environment. In the last few years alone, the world has been surprised by the Brexit vote, the ascendancy of Donald Trump and the rise of populism. But one thing has stayed the same: it’s the younger generation that is at the forefront of current change, shaping the world of the future.

Talking about this generation

The generation we are talking about is the group commonly described as millennials, the people born between the early 1980s and 2000 – some of advisers’ current, and perhaps more importantly, future clients. This tech-savvy group has different expectations and values from those of previous generations, particularly with regard to social, environmental and economic issues. And these attitudes also permeate their approach to investment.

Investors at the younger end of this spectrum are particularly focused on responsible investment. A Standard Life Investments poll in 20151 found that investors aged between 18-24 had the strongest inclination towards investing in companies that achieve positive environmental and social outcomes. But this view is common across the spectrum: according to a Harris poll2 in the US, 67% of millennials said that if they were to invest in the stock market, it would be very important for them to decide which companies or funds to invest in. Other, more general research from the US3, on what motivates millennials has indicated that the majority of this group view themselves as ‘authentic’ and are not willing to compromise their family and personal values. This all adds up to a generation that needs a different kind of financial advice.

One size does not fit all

As a result, more and more of advisers’ clients will be seeking investment solutions that can address their social and ethical considerations – while still, of course, delivering a return on their investments. They will want to know that their discretionary fund manager (DFM) takes these considerations seriously and is a responsible investor. They also want financial advice that fits with their values, and they have strong views on what they will and will not invest in.

It could be well worth delivering what they want: this generation is likely to have money to spend. A study by Accenture4 found that over the next several decades, around $30 trillion in financial and non-financial assets will be passed from the ‘Baby Boomer’ generation (those born between 1946 and 1964) to the next generations, in the US alone.

Millennials’ socially conscious approach is not an isolated ‘sea-change’ in views. It mirrors the burgeoning of the ESG (environmental, social and governance) movement within the corporate world. ESG may have been a niche term once, but it has emphatically moved into the mainstream, where its criteria are used by investors to monitor how companies conduct their business and to help forecast financial performance.

Many companies will acknowledge that businesses seeking to have a positive impact on society are those which will thrive in a world where investment decisions are increasingly being made on this basis – not just by millennials, but by investors of other generations too.

Advice for advisers

Clearly, managing a ‘new wave’ of investors requires a change of approach. But this is nothing new. Advisers are no strangers to change. And now, as client bases change, advisers must adjust and adapt their approach yet again, to maintain competitive advantage and continue to provide a first-class service.

So, what is required, to attract and retain a millennial customer base? A good first step is to understand the socially-conscious approach of this new generation of clients and advise them accordingly.

To sum up, advisers might bear in mind the wise words of Jack Welch, previous CEO of General Electric: “Change before you have to.”

To find out more about Standard Life Wealth, email


  1. Standard Life Investments YouGov poll (online), 2015
  2. Harris poll (online), 2016
  3. Bentley University, 2012
  4. Accenture: Generation D: an emerging and important investor segment, 2012

Standard Life Wealth Limited, registered in Scotland (SC317950) at 1 George Street, Edinburgh EH2 2LL. Standard Life Wealth is authorised and regulated by the Financial Conduct Authority. © 2017 Standard Life, images reproduced under licence.

This article was provided by Standard Life Wealth and does not necessarily reflect the views of Citywire

Comment & analysis