Page 31 - Investment Advisor April/May 2023
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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.



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