Private Bank of America study reveals small investors turning to alternatives, sustainability, and digital assets to create wealth

75% of young investors say it is impossible to achieve above-average returns only with traditional stocks and bonds

Half of the parents think that the children are not ready to deal with family money; Waiting until kids are in their late twenties to start conversations about transferring wealth

New YorkAnd the October 11 2022 /PRNewswire/ — Today, Bank of America released its 2022 Bank of America Private Bank study on wealthy Americans, which finds significant intergenerational differences in approaches to investing, giving and wealth planning. The results show that the shift in influence and control of the largest share of American personal wealth – 84 trillion dollars It is expected to pass primarily from baby boomers to generation X and millennials until 2045¹ It could have major implications for families, wealth managers, charitable organizations, and financial markets in the future.

“Wealth planning is by its very nature multigenerational,” he said. Katie KnoxPresident of the Private Bank of Bank of America. “As we see among our clients’ families, financial behaviors and values ​​are shaped early in life and live on in the legacies that are passed down from one generation to the next. These research findings suggest a greater role for wealth advisors and the financial services industry in helping families transform wealth and meet the needs of the next generation.”

Younger generations are engaging 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 believe that it is possible to achieve above-average returns only with traditional stocks and bonds.

• Eighty percent of young investors look to alternative investments, such as private equity, commodities, real estate and other tangible assets. They allocate three times as much of their portfolios to alternative strategies (16%) and half as much to stocks (25%) than to older investors (5% and 55%, respectively).
• While investors over the age of 43 assert that US stocks offer the best opportunity for future growth, younger investors believe that the greatest growth opportunities lie somewhere in the transformative digital asset space. Nearly half (47%) have Cryptocurrency collectibles.
• Ownership of sustainable investments has doubled since 2018, from 12% to 26% of HNWIs. Nearly three-quarters (73%) of millennials compared to 21% of older adults use sustainable investments, which 72% of all survey respondents agree has the potential to make a positive impact in the world.

Family fortune talk happens but starts late and does not imply financial readiness: 68% of the parents surveyed said they talked to their children about their family’s wealth, including how much money they could inherit the next generation.

• On average, parents don’t initiate conversations about family wealth and transferring wealth until their children are at least 27 years old.
• Only 51% of parents think their children are well prepared to handle family money or whatever inheritance they can get.
• Fifty-eight percent of respondents had limited or no understanding of confidence. Among those without trust, the younger generation is more likely to consider using it in their property plans (91%) than the older generations (56%).

Different ways to a better world: 82% of parents who participate in philanthropy believe that they and their children share the same charitable vision and goals. However, only 41% of older generations believe that the next generation’s charitable efforts will be just as effective as their own. The younger generation is more optimistic about their ability to achieve charitable goals – 87% believe that their donation will be more effective than previous generations.

• When making charitable giving decisions, 76% of respondents, including 88% of women, prefer to establish their own charitable identity away from their families.
• Only half (51%) of donors support the same reasons as their parents.
• Younger generations are more likely to give gifts through a structured medium, including a donor-advised fund (30%), charitable trust (51%), and/or a family foundation (14%) than older generations (15%, 14 %). and 4%, respectively).

Art as an asset: While most owners of artworks aggregate aesthetic value (63%) and only a small number plan to sell them quickly for a profit (9%), art is a dynamic market:

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

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 the advisor relationship—the survey found gaps between the topics people would like to discuss with their advisor and the ongoing conversations.

The three topics high net worth individuals would like to discuss with their advisor today are:

• Tax Planning (88%)
• Estate Planning (81%)
• Investing in an inflationary environment and best use of funds amid a high interest rate (both 80%)

Roughly a third of people who wish do not discuss or discuss enough of these topics with their primary counselor. The results show that for a wide range of areas—from estate planning to strategic use of credit, and from philanthropic planning to investing for positive social or environmental impact—wealth managers have a significant opportunity to add value and build stronger relationships with next generation clients.

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

¹ Cerulli US High Net worth and Ultra High Markets 2021

methodology
Escalent, an independent market research firm, 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 United States. The respondents in the study were at least 21 years old. 3 million dollars In investable assets, excluding initial residence. Margin of error is +/- 3, reported with a confidence level of 95%. Respondents are a nationally representative sample of the US high net worth population and are not necessarily clients of Bank of America or its wealth management and investment firms.

Bank of America private bank
Bank of America Private Bank (privatebank.bankofamerica.com) helps high net worth individuals, families and organizations grow, preserve and share wealth, and achieve unique goals. Private Bank’s client teams adopt a customized approach to providing specialized services and expertise, offering boutique-style private banking that leverages the global resources of Bank of America, one of the world’s leading financial institutions. These specialized teams provide customized solutions for wealth structuring, trust and estate planning, and philanthropy, along with leading investment capabilities and a full suite of cutting-edge banking and lending solutions. The business also offers specialized capabilities in the areas of technical services, sustainable investment, business ownership, succession planning, and specialized asset management.

American bank
Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and medium 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 United State, serving nearly 67 million consumer and small business customers with nearly 4,000 retail financial centers, nearly 16,000 ATMs, and award-winning digital banking with nearly 55 million certified digital users. Bank of America is a global leader in wealth management, corporate banking, investment and trading across a wide range of asset classes, serving corporations, governments, institutions and individuals worldwide. Bank of America provides industry-leading support to nearly 3 million small business families through a suite of innovative, easy-to-use online products and services. The company serves customers through operations across United Stateand its territories and about 35 countries. Bank of America Corporation (NYSE: BAC) shares are listed on the New York Stock Exchange.

For more Bank of America news, including dividend announcements and other important information, visit the Bank of America newsroom and register for email news alerts.

Journalists can contact:
Julia EhrenfeldAmerican bank
Phone: 1.646,855.3267
[email protected]

SOURCE Bank of America Corporation

Originally published at San Jose News Bulletin