Page 31 - Investment Advisor April/May 2023

What’s on the

Minds of Younger

HNW Investors?

BY JOHN MANGANARO

nalysts with Bank of America Private Bank published a market at the top of their list. Younger investors, led by millen-
A study of the savings and investing behaviors of wealthy nials, put U.S. stocks at the bottom of their list — behind inter-
Americans late in 2022, focusing on the different beliefs national and emerging market stocks, alternative investments
and expectations of different generations of U.S. investors. and owning a business.
According to the analysis, the U.S. is already in the early stages As Shepard points out, younger investors allocate three
of a historic generational transfer of wealth — with as much times more of their investment portfolios to alternative strate-
as $84 trillion expected to pass from baby boomers to younger gies and half as much to stocks as older investors do. Younger
generations through 2045. investors are twice as likely to invest in private equity, hedge
Of that massive transfer, according to Bank of America, $73 funds, commodities, infrastructure and tangible assets. “One
trillion will go to heirs and $12 trillion will go to philanthropic really striking finding is that young investors think the best
causes. Speaking about the findings, Ken Shepard, head of growth opportunity lies in the digital asset space,” he explains.
investments and wealth strategy for Bank of America Private “Nearly half report being invested in cryptocurrencies, and
Bank, says generational differences in perspectives about most say they understand the crypto market quite well.”
money and the use and purpose of wealth will have significant
implications for high-net-worth individuals and families — New Investments, Forms of Engagement
and for the advisory professionals serving them. Shepard says it makes sense to see the younger generations of
investors embracing new ideas about wealth generation. He
Lower Faith in Stocks suspects the experiences of going through the Great Recession
The survey shows younger and older investors have starkly and the economic turmoil created by COVID-19 have definitely
different views on the best way to build wealth in the future. affected these people, causing a degree of skepticism about the
Older investors, for their part, put investing in the U.S. stock equity markets not seen in older generations.

APRIL/MAY 2023 INVESTMENT ADVISOR 29