The Rise of the High Net-Worth Millennial

By Paul Joseph

The baby boomer generation is receiving a significant amount of airtime at the moment. So we decided to seek out someone who has a deep insight into their habits and specifically the trends seen among their sizeable and fast-growing high net-worth cohort.

In this exclusive article for, Alpa Bhakta, CEO of Butterfield Motgages, offers her thoughts on what she anticipates being one of her largest and most important client bases of the future.

“Seen as an asset-rich cohort by younger generations, much of the wealth of baby boomers is tied up in property. This is due to house prices being inexpensive relative to incomes in the 70s and 80s, arguably giving them greater purchasing power.

However, as is quite natural, they will inherit the assets and capital of their parents and grandparents over the medium term. Fascinatingly, this phenomenon could amount to one of the largest wealth transfers in human history.

Research suggests that US millennials along (those born between 1981 and 1996) are set to receive $30 trillion in inherited wealth. That is an enormous figure that needs putting into context: the entire world economy (gross world product) is valued at roughly $80 trillion.

This will mean more custom from the millennial investor for financial advisers, signalling a client base with evolving needs.

Naturally, some things will remain the same. According to research, a massive 82% of millennials prefer receiving face-to-face advice when making financial decisions, contradicting the idea that their tech-savviness will lead to universal digitisation. Relying too much on preconceptions could be risky.

A similar number (84%) readily seek financial advice, meaning demand will also sustain. Further, the foundational aim of all investments will be for healthy returns over the long term. Here though most of the similarities end, and advisers must prepare for a new client base with different needs and preferences.

That is because of the growing demand for “impact investments” – also known as ESG or environmental, social and governance investments – among younger people. These are assets that add value to the real world, whether that is achieved via sustainability, political reform or charitable work; it is no longer enough for an asset to be growing, it also needs to be doing something positive for society and the environment.

Some argue that millennials won’t be idealistic forever. The idea that as people age they become less sentimental and more pragmatic is a common one. However, research has found three quarters of millennials aim to be authentic and refuse to compromise on their personal values when investing. Perhaps they are more likely than previous generations to follow through on their principles?

The data seems to suggest as much: almost a fifth of assets under management are now sustainable investments.

It is also confirmed anecdotally. For example, 29-year-old Steph Stephenson heads up the Cordes Foundation, a private investment foundation founded by her father Ron Cordes. Since entering the role a few years ago, she has increased the proportion of impact investments from 63% to 100%, while maintaining consistent yearly returns of 8%.

Looking at these trends broadly, it becomes clear that financial advisers must prepare for the new client base of the future. Over the coming years, as socially responsible investing rises in popularity as a result of the millennial investor, the financial landscape is set to change drastically, and ESG investments could soon be a common and preferable venture among the younger generations.”

Butterfield Mortgages Limited is a London-based prime property mortgage provider with a particular focus on the needs of UK and international HNW individuals.

By Paul Joseph