Millennials Have Strong Desire to Pursue Impact Investing, According to Research by Toniic and Sponsored by Bank of the West
SAN FRANCISCO, CA | Jun 13, 2016
Millennials heavily involved in their investing choices, but need industry knowledge and tools to be successful Financial advisors play a key role in connecting investors with an impact investing solution that meets their needs 79% of millennials describe themselves as impact investors
Bank of the West’s Wealth Management Group today announces results from research conducted by Toniic, a global action community for impact investors, titled Millennials and Impact Investing, a report that provides a look at how millennials are engaging in impact investing, where the young investors hope to be in the future, and what obstacles they currently face in reaching their goals. Commissioned by Family Wealth Advisors, a group within the bank’s Wealth Management Group, the key findings show that millennials who have the means and the interest tend to pursue impact investing through a portfolio approach and by aligning their careers and philanthropic activities with their values and impact investments.
“Millennials place a high importance on philanthropy across the entire spectrum of their lives, as reflected in their investing behaviors and the career paths they choose. We expect that impact investing will not replace other philanthropic efforts, but rather will supplement millennials’ approach to living an impactful life,” said Pierre Ramadier, executive vice president, head of Bank of the West’s Wealth Management Group. “While millennials continue to support impact investing through human and intellectual capital, we could see the industry grow and develop as millennials enter the peak earning phase of their careers.”
A Hands-On Approach
Millennials – in many cases a “do-it-yourself” generation – have applied this philosophy to impact investing. According to the survey, 64 percent of millennials hold their assets individually and are active in managing these assets monthly, if not weekly. In addition to investing their personal wealth into impact investing, millennials seek philanthropic opportunities that align with other aspects of their lives. The research found that philanthropy is often the first step to a future engagement in impact investment and also serves as a tool for connecting family members on collective values.
The Millennial Impact Investor
For Millennials, 79% of those in the survey consider themselves “impact investors.” This group defines impact investing in a number of ways, including those who seek both financial and social impact returns (74%); those who seek opportunities that align with their values, regardless of financial return (13%); and those who say they seek financial returns first with some social benefit (9%). For those millennials who do not consider themselves impact investors (21%), they reason that they lack the knowledge about the field, have not yet invested in impact investing, or simply don’t have the interest at this time.
Despite the interest in impact investing that millennials display, several challenges remain. More than 50 percent say that not having enough knowledge is a barrier they face in moving their assets into impact investments. Nearly 40 percent say that they face push-back from financial advisors, and roughly one-third say they receive push-back from family.
“While some millennials, particularly those with several years of investing experience, are aggressively pursuing impact opportunities, many are still in the fledgling stage of their impact investing journeys and are lacking the proper knowledge to feel empowered in their decisions,” said Steve Prostano, head of Family Wealth Advisors with Bank of the West Wealth Management Group. “We see a responsibility for investing intermediaries to provide the proper tools and information to this generation of investors. We also believe there is an opportunity for the more experienced millennials to instill confidence in their peers.”
Financial advisors play a key role in connecting investors with an impact investing solution that meets their needs. The survey identifies criticisms that millennials have of advisors, notably a gap in knowledge of this space and resistance to the use of technology. However, the use of technology with impact investing presents an opportunity for ‘shared learning.’
“Millennials are eager to develop their knowledge around impact investing, and there’s a real opportunity for financial advisors to become advocates,” said Prostano. “If financial advisors adapt their practices to become more millennial-friendly and develop collaborative impact investing solutions, they will be able to deliver real value to a growing segment of the population.”
Looking Forward Millennials have an appetite for impact investing solutions, and are currently among the most active demographics in the impact investment industry. However, the survey finds that they need more support to realize their impact objectives. Investor networks, advisors, educators and family members can all help millennials to achieve their impact goals.
“Investor networks, advisors, educators, and family members can all be of service to millennials by providing more access to impact investing thought leadership, tools and community. It is our hope that this report will be the catalyst to spur more millennials, their families, and their advisors to action,” Alison Fort, Acting CEO and managing director Toniic EMEA.
To learn more about impact investing initiatives through TONIIC, visit https://www.toniic.com/
To learn more about Family Wealth Advisors and impact investing initiatives, visit https://www.bankofthewest.com/family-wealth-advisors.html
“Millennials and Impact Investing” Report Methodology
The Millennials and Impact Investing report is based on interviews and research conducted by Toniic with its members and key partners between December 2015 and April 2016. Interviewees (ages 20-40) were identified from over seven global organizations. The millennials in this report represent 32 countries on six continents. Two-thirds of the respondents are millennials who are either investor’s with personal assets under management ranging from $500,000 to $99 million, or wealth holders who anticipate future access to larger pools of capital of family assets ranging from $1 million to over $1 billion. The other third of respondents are millennials who either chose not to offer the amounts of assets under management or are millennials who do not anticipate access to a larger pool of assets and are currently owners of assets below $500,000. For the survey, 58 interviewees completed an online survey developed by Toniic and ten were interviewed over the telephone or in person. Data has been aggregated and anonymized. Interviewees are referred to by their first name.
Founded in 2010, Toniic is the global action community for impact investors, with members in 26 countries. Toniic provides family offices, high net worth individuals, institutions and corporations with access to tools and thought leadership as they grow their impact investing practices. Toniic leverages its global member expertise in impact investing to produce open-access e-guides on topics such as crowd investing, early-stage investing, and impact measurement. Toniic ImpactU provides transformational learning opportunities for impact investing around the globe for both members and non-members. For more information, visit www.toniic.com.
About Bank of the West’s Wealth Management Group:
Bank of the West Wealth Management provides wealth planning, investment management*, personal banking, philanthropy, and trust services. The group is part of BNP Paribas' global wealth management business of more than 6,300 professionals in 30 countries worldwide with more than $10.4 billion** in assets under management in the United States and €325 billion ($370 billion) in assets under management globally as of March 31, 2016.
About Bank of the West:
Bank of the West is a regional financial services company chartered in California and headquartered in San Francisco with $77.2 billion in assets as of March 31, 2016. Founded in 1874, Bank of the West provides a wide range of personal, commercial, wealth management and international banking services through more than 600 branches and offices in 23 states and digital channels. Bank of the West is a subsidiary of BNP Paribas, which has a presence in 75 countries with more than 189,000 employees. Follow us on Twitter: @BankoftheWest
Anita Fox, Corporate Communications
Bank of the West
Legal information and Disclosures
Toniic and Bank of the West, its affiliates and subsidiaries, are separate and unaffiliated companies, and are not responsible for each other’s policies or services.
*Securities and variable annuities are offered through BancWest Investment Services, a registered broker/dealer, Member FINRA/SIPC, and SEC Registered Investment Advisor. Financial Advisors are Registered Representatives of BancWest Investment Services. Fixed annuities/insurance products are offered through BancWest Insurance Agency in California, (License #0C52321), through BancWest Insurance Agency in Utah and through BancWest Investment Services, Inc. in AZ, CO, IA, ID, KS, MN, MO, ND, NE, NM, NV, OK, OR, SD, WA, WI, WY, HI, GUAM and CNMI. Advisory Services are offered through BancWest Investment Services, an SEC-registered investment advisor. Bank of the West and its various affiliates and subsidiaries are not tax or legal advisors. BancWest Investment Services is a wholly owned subsidiary of Bank of the West and a part of the Wealth Management Group. BancWest Corporation is the holding company for Bank of the West. BancWest Corporation is a wholly owned subsidiary of BNP Paribas.
**Assets under management refers to assets under administration, management, advisement, and on deposit, including assets with our affiliate BancWest Investment Services ("BancWest") as of March 31, 2016. Deposit and loan products offered by Bank of the West, Member FDIC and Equal Housing Lender. In South Dakota, Bank of the West operates under the name Bank of the West California. Bank of the West Wealth Management offers products and services through Bank of the West and its various affiliates and subsidiaries.
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