With Great Wealth Comes A Great Divide In Social Consciousness
(Bloomberg) -- Impact investing—putting money to use with an eye not just on financial returns but on bringing about social or environmental change—is a hot topic. It may also be a divisive topic among different generations of wealth, according to a new report.
The survey, commissioned by RBC Wealth Management, reached 1,051 individuals around the world with at least U.S. $1 million in assets; 365 were in the U.S. It asked how strongly respondents agreed or disagreed with the statement: “I feel a personal responsibility for my wealth to benefit broader society.”
While only 8 percent of U.S. millionaires 64 and older strongly agreed, more than three times as many Gen X and millennial millionaires did—27 percent. Only 9 percent of younger millionaires chose “strongly disagree,” compared with 21 percent of older millionaires.
Members of Gen X and millennials also seem to work harder to put their money where their mouths are. When asked how they worked charitable giving into wealth planning, 29 percent agreed with the statement that “I align my investments with my giving goals (e.g., through impact investing),” and 39 percent agreed that “Where relevant, my spending aligns with the causes important to me (e.g., buying sustainable products).”
Just 12 percent of older millionaires chose the impact investing answer, and 32 percent said their spending is in line with the causes that matter to them.
Gen X and millennials also felt stronger about passing on their values to a younger generation, at 43 percent to the older generation’s 25 percent. (That resonates with young billionaires as well: Witness the open letter Mark Zuckerberg and Priscilla Chan wrote to their newborn daughter in 2015.) Younger millionaires in the RBC survey also felt more strongly about passing wealth on to the next generation (28 percent to 12 percent).
Other highlights from the survey:
- An inheritance from parents was cited by 22 percent of Americans as a source of wealth, and 10 percent cited an inheritance from other family members. Good old financial investments such as stocks and bonds were cited by 90 percent of U.S. high-net worth individuals as one of the top three ways they accumulated wealth. Such assets as real estate and artwork were the next most common answer, at 41 percent.
- Ninety-three percent of older high-net-worth Americans said they would amass more wealth than their parents. They weren’t so sanguine about that prospect for the next generation, and 48 percent disagreed with the statement that “I believe the next generation will accumulate more wealth than I have.”
- Close to half of younger millionaires said they planned to give away or spend their wealth mostly while they are alive, compared with 22 percent of their older counterparts.
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