Future shock

Green’s research suggests Gen Y is more interested in short term gains than in their future well being

The rosy image of Generation Y as the most concerned or socially minded generation doesn’t stand true for those with share portfolios, a recent survey suggests. Stockbroking firm CMC Markets asked 500 active retail share traders if the ethical standing of a company influenced their investment decisions. Overall, 25 per cent of those surveyed responded: “I don’t care, all I care about is the potential return that they offer on my investment.” Fair enough, but when the same question was analysed through the prism of age, it was interesting to note that those who cared less were younger.

While 18 per cent of Baby boomers (aged 45 years and older) agreed with the statement, a whopping 40 per cent of Generation Y (aged 18 to 29 years) respondents pitched their hardline tents in the “I don’t care” camp. Gen X (30 to 44 years) sat in the middle with 29 per cent.

“Baby boomers are much more likely to say ‘I wouldn’t invest if it was unethical’,” business development director at Retail Finance Intelligence who contributed to the survey Charles Green says.

Green suggests that more Gen Y investors are of the opinion “I’m not concerned... I don’t care, I just want the money.”

Is anybody else perplexed by this outcome? I had imagined that those with the shortest time left to incubate their retirement nest egg would be the least concerned about the long-term viability of the companies they were investing in. Those closer to retirement were hurt more by the recent global financial crisis and probably learned the principles of sustainable and ethical growth the hard way, but I just assumed they would be frantically trying to claw back their savings and would take on a win at all costs mentality. On the contrary, it is Gen Y, who with the most time to build up their investment portfolios, have decided that those old chestnuts of environment, sustainability and governance are but annoying obstacles to their fast cars and fat pockets.

CMC Market’s survey talked to a particular segment of Gen Y, those who bought or sold shares at least once a quarter, so it can’t be said to be representative of the whole population. It may not be cause for concern. Chasing the money could be a phase that young investors go through, like acne or drinking Passion Pop. However, if the survey reflects an attitude that has legs, the investment community of the future could be a reckless proposition.

BRW

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