Millennials want to put their wealth to work for the greater good

Friends tourists selfie millennials colourfulFrancois Nel / Staff / Getty Images‘Our wealthiest millennial clients are at the forefront of the trend towards digital networking and mobilizing investments for public good’

Millennials are more connected and aware of global issues than ever, which is changing the way they approach investing their wealth.

According to a new UBS report, millennials as a generation will likely be worth $US24 trillion by 2020. That figure is one and a half times US gross domestic product.

But young investors are not only looking for financial returns — they want to put that wealth to work for the public good.

“Our wealthiest millennial clients are at the forefront of the trend towards digital networking and mobilizing investments for public good,” writes Simon Smiles, CIO for Ultra High Net Worth at UBS Wealth Management in a news release for the UBS report. “To meet related needs, wealth managers and financial advisers must prioritise new digital services like financial networks and help mainstream impact investing and other sustainability-related initiatives.”

Sustainability is a key issue for millennials. Investors under the age of 35 are roughly twice as likely as other age cohorts to withdraw from investments that have sustainability problems, according to UBS.

And with millennials poised to inherit roughly $US30 trillion from the baby-boomers, catering to the preferences of the younger generation will be key for wealth managers and financial advisers. Wealth managers hoping to win younger clients will likely need to help their investors identify companies meeting standards for sustainability and community impact.

While there are currently no uniform standards in evaluating a company’s sustainability efforts, there are several initiatives underway from groups such as the Global Reporting Initiative, the Financial Stability Board’s Task Force on Climate Change, and the Sustainability Accounting Standards Board that aim to educate and inform the public on the performance of companies’ efforts to increase sustainability.

Mark Haefele, Global CIO at UBS Wealth Management, wrote that this focus on impact investing “gives wealth managers and financial advisers a renewed opportunity to improve their digital capabilities as well as using private capital to help make the world a more sustainable place.”

NOW WATCH: JIM ROGERS: The Fed is clueless and is setting us up for disaster

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.