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Pandemic prompts half of advised UK adults to invest sustainably

Cloudscape photography, fluffy clouds coloured with sunset light in London

According to the second chapter of Prudential UK’s Family Wealth Unlocked report 60% of Millennials, 44% of Gen X and 35% of Baby Boomers, were prompted into sustainable investing by the pandemic.

Catriona McInally, investment expert at Prudential UK, said, “Once perhaps viewed as a fad, sustainable investing is becoming normalised, making it a fundamental building block within intergenerational financial planning. It also enables clients to leave their children more than just a financial legacy in terms of planet, environment, and society.”

COVID-19 has prompted a desire to move into ethical and sustainable investing for more than half (51%) of advised UK adults, according to the second chapter of Prudential UK’s Family Wealth Unlocked report. And while the trend is common across the generations, it’s Millennials who are leading the charge.

Catriona McInally explained, With £5.5tn in personal wealth due to be passed to the next generation by 2047, the role intergenerational planning advice played, prior to the pandemic, was already a significant one. Yet the crisis has reframed financial priorities. Not just for those later in life with IHT liabilities, but for all generations.”

The report, which looks at intergenerational planning and wealth transfer between advised families amid the financial volatility and insecurity of the pandemic, found that 61% now care more about the environment and the planet than they did before the pandemic. More than a quarter (26%) of respondents admit they are more concerned than they’ve ever been. And one in five (21%) say they are more worried now that they have children/grandchildren.

The pandemic has undoubtedly fuelled investor demand for sustainable investing and this is trickling down amongst generations – 60% of Millennials, 44% of Gen X and 35% of Baby Boomers confirmed that COVID-19 has increased their appetite for sustainable investments. And many investors go further. 45% confirmed that since the pandemic they now only want to invest in sustainable companies and funds.

Despite the desire for ethical and sustainable investing, more than a third (36%) of UK adults admit they actually have no idea what their current investments – including workplace and private pensions – are invested in, as they have little to no control.

For many, the crisis has shifted their financial priorities prompting more to seek financial advice. One in two (53%) respondents said they had either already sought advice – or were planning to because of the pandemic. And just over one in five (21%) were seeking advice to ‘begin their ‘investment journey’, potentially fuelled by individuals who had built up savings, not having the traditional outlets for spending their income.  

Catriona McInally, shared a essage for advisers,“With two in five advised clients surveyed confirming they expect to increase the amount they invest in ESG investments over the next five years, incorporating responsible investments into recommendations will become increasingly critical and provides advisers with an exciting opportunity.”

 

A full version of Prudential UK’s new Family Wealth Unlocked report can be found https://www.pruadviser.co.uk/knowledge-literature/insights-hub/igp-hub/wealthunlocked/.

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