Bank of America Private Bank Study Finds Young Investors Turning to Alternatives, Sustainability and Digital Assets to Create Wealth | Techy Kings

[ad_1]

Bank of America today released the 2022 Bank of America Private Bank Study of Wealthy Americans, which finds significant generational differences in approaches to investing, giving and wealth planning. The findings show that a shift in influence and control over the largest share of US personal wealth — $84 trillion is expected to shift primarily from baby boomers to Gen X and millennials by 20451 — could have significant implications for families, wealth managers, charities and financial markets in the future.

Message from Jeff Busconi, Head of Private Banking Services at Bank of America

Message from Jeff Busconi, Head of Private Banking Services at Bank of America
Video Transcript

“Wealth planning is inherently multi-generational,” says Katy Knox, president of The Private Bank at Bank of America. “As we see among our clients’ families, behavior and financial values ​​are formed early in life and live in a legacy that is passed down from one generation to the next. The findings of this research show the greater role wealth advisors and the financial services industry are playing in helping families shift wealth and meet the needs of future generations.”

Katy Knox
Katy Knox

The younger generation involved in new investment strategies: 75% of investors between the ages of 21 and 42, compared to 32% of investors over the age of 43, do not think it is possible to achieve above-average returns solely with traditional stocks and bonds.

  • Eighty percent of young investors are looking for alternative investments, such as private equity, commodities, real estate and other tangible assets. They allocate three times as much of their investment portfolio to alternative strategies (16%) and half as much to stocks (25%) than traditional investors (5% and 55%, respectively).
  • While investors over 43 maintain that US equities offer the best opportunity for future growth, younger investors think the biggest growth opportunity lies somewhere in the transformative digital asset space. Almost half (47%) have cryptocurrency holdings.
  • Ownership of sustainable investments has doubled since 2018, from 12% to 26% of the wealthy. Almost three-quarters (73%) of millennials compared to 21% of older respondents use sustainable investments, which 72% of all survey respondents agree can have a positive impact on the world.

Discussion of family wealth is happening but starting late and not equal to financial preparation: 68% of parents surveyed said they have talked to their children about their family’s wealth, including how much money future generations will inherit.

  • On average, parents don’t start conversations about family wealth and wealth transfer until their children are at least 27 years old.
  • Only 51% of parents think that their children are ready to handle the family money or any inheritance they receive.
  • Fifty-eight percent of respondents have limited or no understanding of trust. Among those who do not have a trust, younger generations are more likely to consider using it in their estate plans (91%) than older generations (56%).

A different path to a better world: 82% of philanthropically involved parents believe that they and their children share the same philanthropic vision and goals. However, only 41% of older generations think the next generation’s philanthropic efforts will be as effective as theirs. Younger generations are more optimistic about their ability to achieve their philanthropic goals – 87% believe their giving will be more effective than previous generations.

  • When making a charitable giving decision, 76% of respondents, including 88% of women, prefer to establish their own philanthropic identity over that of their family.
  • Only half (51%) of all donors support the same cause as their parents.
  • Younger generations are more likely to give gifts through structured vehicles, including donor advised funds (30%), charitable trusts (51%) and/or family foundations (14%) than older generations (15%, 14%). , and 4%, respectively).

Art as an asset: Although most art owners collect for aesthetic value (63%) and only a small number plan to sell it quickly for profit (9%), art is a dynamic market:

  • Sixty percent of art collectors have purchased a piece in the past 12 months.
  • Almost the same number (58%) plan to sell valuable work in the next 12 months.

A greater role for wealth advisors to meet people’s needs: While satisfaction with wealth advisors is high — 97% of survey respondents are satisfied, including 74% who are very satisfied with their advisor relationship — the survey found a gap between the topics they want to discuss with their advisors and the conversations that happen.

The three topics most high net worth people want to discuss with their advisors today are:

  • Tax planning (88%)
  • Estate planning (81%)
  • Investing in an inflationary environment and the best use of funds amid rising interest rates (both 80%)

About a third of people choose not to discuss or discuss this topic with their primary advisor. The findings show that for a variety of areas – from estate planning to the strategic use of credit, and from philanthropic planning to investing for positive social or environmental impact – wealth managers have great opportunities to add value and build stronger relationships with their next -clients. generation.

Visit https://www.privatebank.bankofamerica.com/articles/wealth-study-2022.html for additional insights from the new Bank of America Private Bank Study 2022 on Wealth.

Escalent, an independent market research company, conducted an online survey on behalf of Bank of America from May-June 2022. The survey consisted of 1,052 high net worth (HNW) respondents across the US Respondents in this study were over 21 years of age with at least $3 million in investable assets, excluding primary residences. The margin of error is +/- 3, reported at the 95% confidence level. Respondents are a nationally representative sample of the high-net-worth US population and are not necessarily clients of Bank of America or its wealth management and investment businesses.

Bank of America Private Bank (privatebank.bankofamerica.com) helps high-net-worth individuals, families and institutions grow, preserve and share wealth and achieve unique goals. The Private Bank client team takes a tailored approach to delivering specialized services and expertise, providing boutique-style private banking that leverages the global resources of Bank of America, one of the world’s leading financial institutions. This dedicated team provides customized solutions for wealth structuring, trust and estate planning, and philanthropy, combined with leading investment capabilities and a full range of sophisticated banking and lending solutions. The business also offers specialized capabilities in the areas of art services, sustainable investing, business ownership and succession planning and specialized asset management.

Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investment, asset management and other financial and risk management products and services. The company provides unparalleled convenience in the United States, serving approximately 67 million consumer and small business customers with approximately 4,000 retail financial centers, approximately 16,000 ATM, and award-winning digital banking with approximately 55 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across multiple asset classes, serving companies, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business households through a range of innovative and easy-to-use online products and services. The company serves customers through operations throughout the United States, its territories and approximately 35 countries. Shares of Bank of America Corporation (NYSE: BAC) is listed on the New York Stock Exchange.

For more Bank of America news, including dividend announcements and other important information, sign up for news email alerts.

Julia Ehrenfeld, Bank of America
Phone: 1.646.855.3267
julia.ehrenfeld@bofa.com

1 US High Net Worth and Ultra High Net Worth Market Cerulli 2021

[ad_2]

Source link