Montfort and Boring Money research study finds profound generational shift in ESG sentiment among retail investors

Environmental, social and governance (‘ESG’) factors are critical to investment decision making for young investors according to a new research study published today by Montfort Communications’ asset management practice in conjunction with Boring Money, the retail investment blog and website.

  • 63% of 18-34 year olds said they would choose a new fund manager based on its approach to ESG compared to just 17% of the 55+ age group.
  • Over three quarters (78%) of 18-34 year olds said that ESG considerations affect their investment choices compared to 67% among the 35-54 age group and less than a third (32%) of the 55+ demographic.

New generation of investors use different sources for ESG information:

  • 18-34: Friends and family are the most important source (cited by 38%), followed by YouTube (37%), ahead of financial advisers on 36%.  Twitter was cited by 23% of this group.
  • 35-54: Investment platforms (39%), financial advisers (33%) and investment information sites such as Morningstar and Trustnet (31%) are the most important sources for this group.
  • 55+: Just over a third (34%) said they did not need or get information on ESG.  National newspapers (27%), financial advisers (28%) and investment platforms (26%) were cited as the most important sources by others. In contrast to younger demographics, only 7% relied on friends and family and 1% cited Twitter as a source.

Women investors have stronger conviction in ESG than men:

  • Over half of women (53%) said they would choose a new manager based on their approach to ESG versus only 37% of men.
  • Women are also much more likely to consider ESG in their investment choices, with 69% saying all or part of their portfolio considered ESG issues, compared to 53% of men.

Nick Bastin, Senior Consultant at Montfort, said:

“This survey shows that ESG forms a critical part of the decision-making process for younger demographics. To reach them, asset managers need to go beyond traditional channels, but the reward for doing so is clear. These long term potential revenue streams represent a massive opportunity that asset managers ignore at their peril.”

Holly Mackay, Founder and CEO of Boring Money, said:

“Two of the key factors which will reshape the make-up of who holds the wealth in coming years are intergenerational transfers and the increase of older women acting as primary financial decision makers, through independent wealth, divorce or bereavement. Both younger people and women increasingly want to include ESG factors in their decisions. Those asset managers who not only embrace this but articulate and evidence it, will stand to gain from these structural shifts.”

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