Baby Boomer and Generation Y investors share the same top three investment considerations, reveals a new global survey by deVere Group.

Those in their 50s to late 60s and those aged between 18 and 30 both ranked risk level, portfolio diversity and previous returns on the investment as the three most important factors when selecting investments.

Those in Generation X – defined as those aged 30 to late 40s – prioritised portfolio diversity, risk level and tax considerations.

However, the Baby Boomers gave more weight to tax considerations than social responsibility of investments, the reverse of the Gen Y-ers who placed social responsibility before tax implications when considering investment opportunities.

Nigel Green, CEO deVere Group
Nigel Green, CEO deVere Group

deVere Group, one of the world’s largest independent financial advisory organisations, polled more than 880 of its clients aged between 22 and 70 in the UK, the U.S., Hong Kong, South Africa, India, the UAE, Thailand and Indonesia.

Respondents were asked to rank the following in terms of importance when deciding on investments: risk level, tax considerations, the previous returns on the investment, the impact on the diversity of their portfolio, and the investment’s social responsibility credentials.

A breakdown of the poll can be found below.

Nigel Green, founder and chief executive of deVere Group, which has 80,000 clients and $10bn under management and advice, says: “Of course investors of all generations are seeking investment funds that offer the very best strategic growth potential for their wealth.  But as the survey highlights, they prioritise selection factors differently to try and achieve broadly the same outcome.

“Interestingly, it would appear that the investment mindset of so-called Generation Y is more aligned with that of the Baby Boomers than that of Gen X-ers.  Many will find this striking as traditionally risk levels between these two groups would be thought to be diametrically opposed as the younger generation has considerably more time to reach their financial goals and would therefore, it would be typically assumed, have a higher appetite for risk.

“This phenomenon could perhaps be explained by the global economic crash of 2008 which has impacted on the investment psychology of young people.”

He continues: “Our advisers who carried out this poll also reported that besides sharing priorities and values when considering investments, Baby Boomers and Generation Y-ers had similar levels of “active engagement” regarding their investment portfolio.   Both generations expressed a keen sense of involvement and possessed a good level of knowledge surrounding some of the external factors that could present potential strategic growth or risks to their investments.”

Mr Green concludes: “Generation X-ers place a higher emphasis on tax than other generations because many will be approaching the peak of their earnings and savings career, and so tax planning becomes important. Younger people don’t earn or save enough for tax to be a major consideration, while the Baby Boomers have typically already done their tax planning.

“The Generation Y consideration of ethical investing reflects a youthful idealism that may survive into middle age, but more hard-headed considerations are likely to take over.

“The fact that all three generations identify the need for a diverse portfolio, with attention paid to risk as much as to return, is evidence of growing financial literacy amongst savers and is to be welcomed.”

How do the different generations select investments? 
 Baby Boomer (50s-late 60s)Generation X (30s to late 40s)Generation Y (18 to 30)
Risk level62%26%59%
Tax considerations7%13%2%
Previous return on the investment8%4%14%
Social responsibility5%2%3%
Diversification of portfolio18%55%22%

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