Rich heirs prioritise financial returns over sustainable, do-good strategies just as much as the previous generation did: UBS

As private bankers to the super-rich tailor their services to what they expected to be a new globally conscious generation, it turns out that wealthy millennials are not much more green or altruistic than their parents.

That is the finding of UBS Group’s survey of 121 family offices, including some of the world’s wealthiest. The incoming heirs of dynasties prioritise financial returns over sustainable, do-good strategies just as much as the previous generation did, according to the survey. A majority prefer to keep investments just as they are.

“Unlike what you hear, a next generation that is meant to be very green and very altruistic and very much anti-business, is actually very pro-business,” Josef Stadler, head of the global family office unit at UBS, said in an interview.

Billionaires will pass on more than US$2 trillion of wealth within the next two decades, according to research by UBS and PwC. The world’s top wealth managers have been bolstering their offerings of green, sustainable and good governance investments – known as ESG – as studies from as recently as last year indicated that they would be more attractive to millennials taking over.

“We have learned this is not the case,” said Isadora Pereira, a UBS director and one of the report’s authors. “They are interested and they are engaged in impact and sustainable investing, but I just don’t think it’s this black-and-white, water-to-wine change that has been discussed.”

More than half of the family offices surveyed are just as focused on maximising financial returns as in the past. In Asia and the United States, the proportion increases to almost three-quarters. Many rich families still see philanthropy rather than investing as the way to have an impact on ESG issues.