Generation Y millionaires take more risks, take more advice

Baby Boomers looking a little dull...

Next-gen millionaires are more bullish investors than their older generation counterparts, with almost four in ten buying into high-risk asset classes such as venture capital and derivatives.

That’s according to new research by US-based financial services firm Fidelity Investments, which surveyed over 540 individuals with investable assets of at least $1 million.

It found that eighty-one per cent of Generation X and Y millionaires – those up to 48 years old – said they preferred to pursue aggressive investment strategies, compared to 27 per cent of the baby boomers.

Wealthy next-gens also had a more diversified investment portfolio than the older generation. 51 per cent of Gen X and Y millionaires, for example, owned foreign currency; 43 per cent invested in international individual securities; 39 per cent bought into venture capital; and 38 per cent chose derivatives. The baby boomers’ figures (respectively) were 6, 27, 12 and 10 per cent.

In the short term, the next-gens surveyed planned on making changes to their portfolio, while 39 per cent of the baby boomers were more conservative and didn’t plan on adding anything until the end of the year.

But the younger HNWs weren’t just more bullish about investing, they were also more confident about their own abilities, with 71 per cent considering themselves knowledgeable about investing, compared to 44 per cent of their old-generation counterparts.

Asking for advice

Perhaps surprisingly, then, the report found that next-gens millionaires were also more likely than the older generation to turn to financial advisers for investment recommendations, with 92 per cent using a financial adviser, compared to 68 per cent of the baby boomers.

According to the study, the financial crisis was the main reason why the young HNWs sought financial advice, with 69 per cent of those surveyed admitting doing so because of more volatile market conditions. This compared to only 17 per cent of the baby boomers.

However, next-gens remained very much involved in their investment decisions, with those working with an adviser saying they independently managed almost half of their own assets. In comparison, baby boomers HNWs who have financial advisers said they managed only a third of their wealth by themselves.

61 per cent of the Gen X and Y millionaires also said they made their own investment decisions but used advisers as sources of information and to get a second opinion. Only six per cent admitted to delegate their decisions entirely to an adviser, compared to one in five of the baby-boom generation.

According to the report, next-gen millionaires tended to use other people as their sounding board when making investment decisions. Apart from their advisers, they were more likely to turn to family and friends, with 23 per cent of those surveyed doing so, compared to only thirteen per cent of the older generation.

Work hard, play hard

But younger millionaires aren’t just focused on how to maximise their money, the research found. In fact, they were more likely to indulge in comforts than the older generation. Eighty-seven per cent of Gen X and Y HNWs, for example, spent their holidays abroad every year, compared to only 56 per cent of the baby boomers. Similarly, 63 per cent of the next-gens millionaire owned a second home and nearly four in ten flew first class, compared to 21 and 5 per cent respectively for the older generation.

And if they liked to spend more, Gen X and Y millionaires also liked to give more, as they averaged $54,000 in annual philanthropic donations, compared to $12,000 for their older counterparts. They also volunteered more of their time to charitable causes, with 82 per cent volunteering or serving on charity boards, compared to less than 50 per cent for the baby boomers. 

This piece first appeared on Spear's Magazine

Read more by Giulia Cambieri

Photograph: Getty Images

This is a story from the team at Spears magazine.

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Paul Nuttall is like his party: sad, desperate and finished

The party hope if they can survive until March 2019, they will grow strong off disillusionment with Brexit. They may not make it until then. 

It’s a measure of how far Ukip have fallen that while Theresa May faced a grilling over her social care U-Turn and Jeremy Corbyn was called to account over his past, the opening sections of Andrew Neill’s interview with Paul Nuttall was about the question of whether or not his party has a future.

The blunt truth is that Ukip faces a battering in this election. They will be blown away in the seats they have put up a candidate in and have pre-emptively retreated from numerous contests across the country.

A party whose leader in Wales once said that climate change was “ridiculous” is now the victim of climate change itself. With Britain heading out of the European Union and Theresa May in Downing Street, it’s difficult to work out what the pressing question in public life to which Ukip is the answer.

Their quest for relevance isn’t helped by Paul Nuttall, who at times tonight cast an unwittingly comic figure. Pressing his case for Ukip’s burka ban, he said earnestly: “For [CCTV] to work, you have to see people’s faces.” It was if he had intended to pick up Nigel Farage’s old dogwhistle and instead put a kazoo to his lips.

Remarks that are, written down, offensive, just carried a stench of desperation. Nuttall’s policy prescriptions – a noun, a verb, and the most rancid comment underneath a Mail article – came across as a cry for attention. Small wonder that senior figures in Ukip expect Nuttall to face a move on his position, though they also expect that he will see off any attempt to remove him from his crown.

But despite his poor performance, Ukip might not be dead yet. There was a gleam of strategy amid the froth from Nuttall in the party’s pledge to oppose any continuing payment to Brussels as part of the Brexit deal, something that May and Corbyn have yet to rule out.

If May does manage to make it back to Downing Street on 8 June, the gap between campaign rhetoric – we’ll have the best Brexit, France will pay for it – and government policy – we’ll pay a one-off bill and continuing contributions if need be – will be fertile territory for Ukip, if they can survive as a going concern politically and financially, until March 2019.

On tonight’s performance, they’ll need a better centre-forward than Paul Nuttall if they are to make it that far. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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