While the younger generations have been driving interest in ESG, it appears that the older generations are changing their stance on aligning their values with sustainable investments as they want to leave the world in a better place. This is according to a study by Campden Wealth for Global Impact Solutions Today (GIST) and Barclays Private Bank. They collected data from nearly 150 respondents, including the world’s wealthiest individuals, families, family offices, and their foundations. The respondents come from 35 countries and have an average of $730m in assets under management. The study found that 36% want to demonstrate their family wealth can be invested for positive outcomes, a 13% increase from the previous year’s findings. In addition, more than half said sustainable investing is bridging the gap between younger and older generations, and almost 70% reported sustainable investing is being embraced by the generation in charge of the family’s wealth. More than three-quarters (77%) said they want to leave the world a better place, while 84% said their private capital will be essential in addressing climate change. Damian Payiatakis, head of sustainable and impact investing at Barclays Private Bank stated, “These global wealth holders have realized their capital makes an impact on the world. Accordingly, they want their portfolio to be lucrative and to be personally meaningful. The mindset shifts I’m seeing is to invest not only for tomorrow but to influence it.”

Finsum:Based on the results of a new study, impact investing is bridging the gap between younger and older generations, with almost 70% reporting that sustainable investing is being embraced by the generation in charge of the family’s wealth.

According to a new report, advisors may be missing out if they are reluctant to target next-gen investors. Research from Fidelity Institutional Insights found that investors under the age of 40 are inheriting more than $540 billion in the United States every year, 30% of the total wealth transferred. In addition, data from Cerulli Associates shows that the demographic will control three-quarters of $84 trillion in inherited wealth by 2045. The Fidelity report is a wake-up call for advisors that shy away from young clients due to higher debt, fewer assets, and generational differences. Fidelity Investment’s vice president of practice management and consulting, Anand Sekhar, said the revenue-weighted age of the average Fidelity advisor’s client is 65. According to Sekhar that creates a huge problem for advisors in the future. With older client rosters, advisors could see widespread drawdowns and not enough clients to take their place. Making matters worse is that only 13% of advisors are engaging with clients’ children and grandchildren, which puts billions currently managed at risk. Fidelity’s data suggests that if firms can reduce the revenue-weighted age of clients by just seven years, from 69 to 62, it can increase a firm’s growth tenfold. The research also suggests that establishing those relationships now could produce greater returns as investors under 40 are investing earlier than their parents and are willing to pay for advice.

Finsum:With the average revenue age of clients nearing 70, many firms could see soon see massive withdrawals with no clients waiting in the wings, which is why advisors need to start engaging with clients’ children and grandchildren now. 

Portfolio management and trading platform Vestmark recently announced that it has launched six separately managed account investment strategies, the firm’s first asset management offering. The strategies, called "Focused Index Portfolios,” follow S&P Dow Jones Indices, but in an SMA wrapper to allow for some customization and tax-loss harvesting. Robert Battista, senior vice president, and managing director of Vestmark Advisory Solutions said that the firm sees the launch as a first step toward a fully personalized direct indexing investment platform which Vestmark expects to roll out later in the year. The portfolios have minimums as low as $100,000, with fees comparable to an ETF. Three of the Index Portfolios are based on custom indices Vestmark built with S&P Dow Jones, including the S&P 500 Focused 100 VAST Portfolio, the S&P 500 Focused 50 VAST Portfolio, and the S&P 500 Catholic Values Focused 100 VAST Portfolio. The other three strategies are based on existing indices such as the Dow Jones U.S. Dividend 100 VAST Portfolio, the S&P 500 ESG Elite VAST Portfolio, and the S&P Developed Markets 100 ADR xUS VAST Portfolio. For now, the new strategies are available in the Vestmark Manager Marketplace, but Vestmark plans to distribute them to broker/dealers, independent advisors, and RIAs via a new sales team dedicated to the company's direct indexing services.

Finsum:Trading platform Vestmark launched six index portfolios as the firm's first step towards a fully personalized direct indexing investment platform which is expected later in the year.