On October 31, 2024, we hosted the second session of the “Constructing Change Webinar Series,” part of our lead-up to the Building Bridges 2024, in Geneva this December. This latest session, titled “Where’s the Action? Next Gen Wealth Holders on Overcoming Barriers to Drive Impact” brought together thought leaders and wealth holders to discuss what has been called one of the most significant financial shifts of our time. With an estimated $84 trillion expected to transfer from Baby Boomers to younger generations by 2045, the discussion explored the unprecedented opportunities and challenges that come with this shift.

Barriers to Impact Investing

Dr. Paetzold set the tone by underscoring the urgency of the next generation’s role in addressing global issues such as climate change and social inequality. He presented how the Centre for Sustainable Finance & Private Wealth represents an opportunity to redefine wealth for societal good. Following this, each panelist shared insights on the structural, emotional, and practical challenges they have encountered in their journey to make impactful investments:

Antonis Schwarz, an impact investor known for his work with Good Move Initiatives, discussed the cultural and family-driven pressures that often discourage next-generation wealth holders from engaging in impact-driven investing early in their careers. Benjamin Firmenich, Co-CEO and Head of Impact at Impact Finance, shared his experience launching a fund focused on sustainable agriculture and the need for wealthy individuals to overcome the fear of taking risks with their family’s capital. Katharina Brück, an angel investor with Femventix, brought a personal perspective, recounting how her own journey into impact investing was influenced by a major shift in her identity after inheriting family wealth.

The panelists highlighted several key barriers that next-generation wealth holders often face:

– Family Influence and Generational Gaps: The previous generation’s advisors and family dynamics can limit younger wealth holders’ freedom to make impact-driven investment choices.

– Lack of Financial Knowledge and Fear of Risk: Many inheritors are not equipped with a finance background, leading to insecurity in making investment decisions.

– Social Expectations and Cultural Norms: In certain regions, the expectation to establish professional credibility before utilising inherited wealth can delay entry into impact investing.

Practical Solutions for Impact-Driven Investing

The panel concluded with advice for overcoming these barriers and creating pathways to impactful wealth management. This included seeking out peer networks, connecting with other wealth holders who share the same values can provide next gens with the confidence and knowledge to navigate impact investing. Starting small, but staying committed, allowing them to gain experience and learn from early mistakes without feeling overwhelmed. And lastly, open family dialogue on impact, effective communication with family members about the benefits and returns of impact investing can help bridge generational divides.

Inspiring Action for a Better Future

This webinar highlighted that the great wealth transfer represents not only a shift in assets but also a shift in values. The next generation is increasingly eager to use their wealth as a tool for societal good, signaling a promising evolution in how capital can be deployed for impact. As the panelists showed, next-gen wealth holders are finding ways to overcome barriers and drive meaningful change.

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