As the great wealth transfer is set to pass a historic
Millennials (1981-1996) are expected to inherit $48 trillion, and Gen Z (1997-2012) $39 trillion, by then, and how they invest is already disparate from their Gen X and baby boomer investor predecessors.
In Bank of America Private Bank's "
Those values and ideas mean advisors who are willing and able to adapt to those values and perceptions then have an opportunity to build trust with this burgeoning client base.
What investments attract millennials and Gen Z?
Instead of traditional investments, young investors, aged 21 to 43, are more interested than their elders in newer financial vehicles like alternative and crypto assets. Some 93% of Bank of America survey respondents said they plan to allocate more to alternatives in the next few years, and they rank cryptocurrency among the top opportunity areas for growth.
Less than half, or 47%, of investment allocations for 21 to 43-year-olds are in stocks and bonds, compared to 74% for investors over the age of 44.
"We're living through a period of great social, economic and technological change alongside the greatest generational transfer of wealth in history," said Katy Knox, president of Bank of America Private Bank. "Our study shows that wealthy Americans are focused on diversification, long-term goals and making a lasting impact with their wealth."
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With a major focus on digital assets, nearly half of respondents said they have not considered hard assets, like real estate or other tangible assets, according to the survey.
Millennials' focus on digital assets is creating a disconnect between their actions and ultimate wealth goals. Half of millennials' financial goals include saving for retirement (51%) and having emergency savings (50%), according to a 2025 survey done by San Francisco-based
Though investing in crypto and stocks help to compound wealth over time, millennials, by and large, aren't investing in other vehicles that have traditionally built wealth, like mutual funds, ETFs and building diversified portfolios, said Joe Sinha, chief marketing officer of Parnassus Investments.
It stems from a lack of knowledge and confidence in traditional investments, Sinha said.
Millennials are also more conservative with their investments. In Parnassus' survey, 80% of millennials were uncomfortable with even a 10% move in their portfolio. Typically, even a 20% change is not a reason to change asset allocation.
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"If more than 80% percent are not OK with 10% volatility in their overall portfolio, but they're buying stocks and crypto, there's just a mismatch there," Sinha said. "Millinneals are trumped up in Robinhood and popular media gamification, but that runs counter to a more prudent investment plan."
Advisors can help the next generation navigate the disconnect and help compound wealth by being persistent and disciplined about explaining living below means, explaining risk tolerance, and helping them understand the best investments to have good, actively managed funds, Sinha said.
Their values go beyond the dollar
For millennials, investments are led by personal values. They're focused on sustainability — younger investors are more likely to consider a company's environmental, social and governance (ESG) record when making investment decisions, according to Bank of America.
While 82% of investors between the ages of 21 and 43 consider a company's ESG record, only 35% of investors 44 and older do.
More than 20% of investors 21-43 have invested in companies focused on positive impacts, according to Bank of America. Their investment values mirror their consumption and
"They want to make sure that the people that they're doing business with have high integrity, and they have strong values," Sinha said. "For advisors, they can think about what the potential sustainable solutions are for millennials — that will help engage them, so that they will stay engaged with you."
A Parnassus Investments survey found that 84% of millennials said it was important that their investments align with their values, but 53% said it was hard to do.
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More than 85% of millennials surveyed said environmental or social issues are an important part of their daily lives, and that 87% say they want to help make a difference in the world, according to Parnassus.
Jennifer Wines, author and founder of Invisible Wealth Consulting, has also found that millennials are primarily values-focused.
"They're interested in creating value predicated on values," Wines said.
Millennials and Gen Z often value authenticity, transparency, education, values, purpose and innovation, Wines said. Their mental and emotional approaches are different, primarily due to technological advancements and societal shifts.
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"The next generation is actively seeking guidance from advisors who embrace the notion that wealth extends beyond the dollar," Wines said. "They're interested in holistic wealth management, which honors both the quantitative and the qualitative."
Connecting with millennials
As the first fully digital generation, millennials consume and engage with information online, primarily via video, with short spurts of information. They also like to be communicated with more frequently.
"The industry is really set up for quarterly updates or quarterly fact sheets, but only 6.5% of millennials wanted quarterly updates. Thirty-nine percent wanted weekly updates," Sinha said. "You don't have to do a full portfolio review every week, but make sure that you're constantly engaging the way they do digitally."
People also like to do business with people with similar perspectives. Advisors who make an effort to connect with the younger generation, especially those working intergenerationally, would benefit from structuring their practice to maximize relationships with clients' adult children, Sinha said.
