The great asset transfer is upon us. According to whose calculations you rely on, baby boomers will pass on something in the order of $30-34tr in the coming twenty to thirty years. That marks the greatest generational transfer in history and will lead to major changes across many walks of life.
While the full consequences of this transfer are best left to the futurologists, there are a couple of obvious themes for those of us focused on investor relations.
Technology
Both Generation X and Millenials have become used to a technology-driven world in which information and services are available on-demand, anywhere. The old methods of investor engagement will have to change to match the appetites of audiences who are used to seeing frequent updates, rich content (including video), and unmediated interaction.
Companies that respond well to this challenge will be well positioned to maintain their investor interest. Providing easy, mobile access to information about the company, it’s leadership and its social impact is crucial.
Changing focus
While the rise of the millennial investor will lead to changes in the way that companies interact with their audiences, the content of that story is also likely to change. Whether we refer to terms such as impact, corporate social responsibility (CSR) or environmental, social and governance (ESG) investing, the end-result for companies is essentially the same. There is a real requirement to explain how your company effects the environment and society it operates in. This isn’t simply an ethically driven trend, there is a growing body of evidence that shows that funds that invest with an eye to ESG also outperform.
Today, there are an estimated $21tr of assets that are invested in funds that have an ESG element to them. However, 86% of Millenials support ESG goals – and as I mentioned at the beginning, they will shortly be inheriting a large slice of that $30tr generational transfer.
Having clear policies, measuring your impact, and communicating your efforts are no longer nice-to-haves, they’re necessities.
