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Millennials impacting values based investing, says SLI white paper

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The rise of the millennials and the effect they are having on values-based investing is the focus of a new Standard Life Investments’ white paper, which explores their potential impact on traditional financial management, as well as the many opportunities they create for the industry. 

 

The report highlights that millennials want to invest in companies that achieve positive social outcomes and new products will need to be created that reflect their attitudes and beliefs. For example, impact investing has grown in prominence in recent years, driven primarily by millennials looking for investment vehicles that make a difference to the world. At present impact investing remains on the fringes of the asset management world ,but this looks set to change as an increasing number of millennials start investing. 

 

In addition, a recent Standard Life Investments YouGov poll on values based investing showed a strong link between age and values. The younger groups surveyed (those between 18 and 24), who were investors, having the strongest inclination towards investing in companies that achieve positive environmental and social outcomes. This trend decreases with age. 

 

The survey also found that nearly half (48 per cent) of respondents affiliate with some form of principles led investment, while a similar proportion (45 per cent) feel strongly about the environment, and 63 per cent think values based investing delivers the same or better financial returns.

 

In addition, 47 per cent of respondents have boycotted a company or brand because they disagree with the ethics of their behaviour, while only only 27 per cent have no ethical concerns that would impact investment decisions.

 

Amanda Young (pictured), Head of Responsible Investment, Standard Life Investments says: “For the investment industry, the need to be as transparent and accessible as possible will be a key driver in building trust with millennials. Products will also have to reflect their beliefs and priorities. As such, the investment industry will need to consider and develop innovative ways to invest that reflect these changing attitudes. Of course, returns will remain important. However, millennials are increasingly demanding investment solutions that ensure their money also has a positive environmental and social impact. These factors will create challenges and sizeable opportunities for the investment management industry.”

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