The United States wealth management industry is in the midst of a transition unlike anything it has ever seen. Over the next several decades, as baby boomers age and transfer their wealth to the next generation, an unprecedented $41 trillion will change hands, according to researchers from the Social Welfare Research Institute at Boston College, whose report focuses on the 55-year period between 1998 and 2052.
These young inheritors are, for the most part, Millennials the generation born between 1978 and 2000. As it turns out, this groups attitudes about social responsibility, private capital and the intersection between the two do indeed appear to differ from those of their parents, perhaps starkly.
Not surprisingly, this figure has captured the rapt attention of financial institutions, which are beginning to realize that they will need to alter their own approach to socially responsible investing if they are to attract any portion of this huge tranche of transferred wealth.
Think back to the great philanthropists of years past who thought of making money in the first half of their lives and giving it away in the second half, says Justin Rockefeller, a trustee and member of the investment committee at the $739 million Rockefeller Brothers Fund, great-great grandson of John D. Rockefeller, and, at 33, himself a Millennial. Today, that view is still pretty pervasive, that theres capitalism and making money on one side, and philanthropy on the other. I think the younger generation is seeing that as a false dichotomy, or at least something that will increasingly become a false dichotomy. ....