We are experiencing the financial clash of generations, says KEN COSTA
Christmas is traditional a time for families and friends to come together, a gathering of the generations young and old.
Carols, turkey and stress will inevitably accompany the hoped-for tidings of intergenerational comfort and joy.
It is no exaggeration to say that we are experiencing the clash of generations.
Boomers view Zennials (Gen Z and Millennials) as worthless and entitled; they, in turn, glower at the asset inflation that has enriched boomers and destroyed their ability to find affordable rental housing, let alone get into the housing market.
Experience: Ken Costa is a seasoned investment banker, investor and author
As I wrote in my recent book The 100 Trillion Dollar Wealth Transfer, these divisions run deep and if the consequences are not addressed, the conflicts will lead to ongoing conflict.
It's almost too perfect a Christmas story. Ownership, often driven by greed, has characterized the ethos of the boomer generation.
To the Zennials, today's bankers and asset managers in their ivory towers on Bishopsgate are modern-day Scrooges and Marleys.
They push the older generation to examine their conscience and think about the legacy they want to leave behind.
This new generation of investors will prioritize shared ownership over single ownership, and will demonstrate the altruism of Christmas all year round. According to a recent survey by Prudential, 45 percent of millennials want to invest only in ethical companies and funds.
Seismic social, political and financial changes will result from what is called the Great Wealth Transfer.
The newly acquired financial assets of the Zeennial generation will be uniquely powered by technology, and these digital natives have clear priorities for how the tools of power should be deployed in society: care for the planet, justice and fairness.”
This transfer is not the child of tomorrow. My generation – the Bank of Mum and Dad – has already transferred £85 billion of assets to enable the next generation to pay deposits on their homes.
What role should we boomers play in this Great Wealth Transfer? We must ensure that this new generation, which wants to cultivate a socially powered capitalism, can benefit from the experience of our years and be reminded of the importance of rewarding risk-taking and value creation.
To avoid misunderstandings between generations, we need to learn a new way of communicating.
I call this CO. We are already familiar with co-living, co-working, co-investing. But what we need is a comprehensive philosophy that focuses on the idea that working together will lead to far greater gains than the losses of acting on our own. We must now adopt a co-destination.
The realization that we must help shape our destiny together, just as Scrooge opens himself to compassion and kindness, and redistributes his long-hoarded wealth more fairly.
Ken Costa is a seasoned investment banker, investor and author. The $100 Trillion Wealth Transfer: How the Transfer from Boomers to Generation Z Will Revolutionize Capitalism is published by Bloomsbury.