Young people are keen to contribute to good causes but lack advice on how best to invest, making philanthropy training a “huge growth opportunity” for advisers.
According to research by Pro Bono Economics, there are around 230,000 people under the age of 35 with a net worth of over £100,000, but around 110,000 of them may not be in contact with a financial or wealth adviser.
In addition to enabling large charitable donations, PBE argued that offering philanthropic support to young high-net-worth clients represents a “significant growth opportunity” for financial advisors.
Nicole Sykes, director of policy and communications at Pro Bono Economics, argued that now is an “opportunity” for financial advisers, with huge wealth transfers taking place, and advised: “Now is the time to act.”
“By championing philanthropy, advisors can stay relevant and leverage the great goodwill of a generous generation,” she explained.
“Firms and advisors that currently do not offer philanthropic services, or limit their philanthropic offerings to the ultra-high net worth, risk being left behind by demographic trends, demand and government action.
“But by evolving and embracing challenges, we can attract the next generation of customers in a competitive market, become more giving, and contribute to a socially conscious society.”
To address this issue, the PBE has brought together a coalition of the Financial Conduct Authority, the Treasury, the Department for Culture, Media and Sport, as well as accreditation bodies, government agencies and charity experts, to develop a charity initiative for advisers. We have strengthened our training.
The PBE study highlighted the need to address this issue, noting that an estimated £5.5 trillion is expected to be passed on to younger generations over the next 20-30 years.
Financial advisers and businesses already looking to attract businesses from the 230,000 under-35s with net financial assets of more than £100,000 “need to adapt”, he advised.
Encouragingly, the survey found that 88 per cent of wealthy young people already donate to charity, and PBE found that 90 per cent of those surveyed expressed a strong desire to have a positive impact on society with their money. It was found that it was expressed.
Therefore, financial advisors need to “tackle their philanthropic instincts” as this generation is giving more to charity than ever before, PBE said.
The research also found that while younger generations are also more likely to seek financial advice, more than half of wealthy people under 35 are more likely to choose a financial advisor to provide philanthropic advice.
tom.dunstan@ft.com
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