To cater to high net worth (HNW) millennials, wealth managers should focus on delivering personalised online platforms that present clients with global opportunities to generate social and financial returns on capital, according to a report by UBS Wealth Management’s Chief Investment Office.
“Wealthy millennials and other private clients have expressed growing interest in innovations like digital platforms and sustainable and impact investing,” says Mark Haefele, global CIO at UBS Wealth Management. “This gives wealth managers and financial advisors a renewed opportunity to improve their digital capabilities as well as using private capital to help make the world a more sustainable place.”
UBS said in a statement today that millennials are likely to be worth up to $24 trillion by 2020 – about 1.5 times the US economy.
Millennials lead other generations in demanding online services and are also more interested than others when it comes to sustainability issues, as they are more aware of “global problems”, the report says, adding that clients under the age of 35 are roughly twice as likely to withdraw from investments that are experiencing sustainability concerns.
Meanwhile, the Swiss bank says e-commerce “provides a model for personalised digital wealth platforms beyond financial ‘supermarkets’”.
“By offering personalised information and opportunities, and social contacts who share clients’ passions and business interests, multinational platforms can appeal to millennials’ current demands and other clients’ evolving digital tastes.”
Simon Smiles, CIO for ultra high net worth at UBS Wealth Management, said: “Our wealthiest millennial clients are at the forefront of the trend towards digital networking and mobilising investments for public good.”
“To meet related needs, wealth managers and financial advisors must prioritise new digital services like financial networks and help mainstream impact investing and other sustainability-related initiatives,” Smiles says.
The bank, which raised US$471 million for its Oncology Impact Fund last year, says it will allocate at least US$5 billion worth of client assets into impact investments relating to the UN Sustainable Development Goals over the next five years.
“UBS will also help launch Align17, a philanthropy and investment platform and online network focused on SDG funding gaps,” the bank says.
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