How Do You Get a New Generation to Invest? Ask This Harvard Guy
Life + Money

How Do You Get a New Generation to Invest? Ask This Harvard Guy


The rap against millennials is that they believe they’re exceptional and ought to be treated that way. Usually, the complaints are written by disappointed baby boomers trying to come to grips with the new generation. One millennial plainly agrees that his cohort is obsessed with asserting their individuality – and thinks he can make some money from it. 

Zach Lupei, a 28-year-old Harvard Business School student, believes that his generation’s sense of specialness extends to how they invest their money, so he recently launched his own millennial-focused investment advisory firm, Valued Investing out of Harvard’s Innovation Lab. His plan is to offer customized portfolios to young people concerned about socially responsible investing, but who balk at the one-size-fits-all funds currently on the market. 

Related: How to Grow the U.S. Economy? Ask a Millennial 

“I don’t think millennials ascribe to this idea that we are all one voting block or that we all think the same way,” said Lupei. “We were raised by our parents to each feel like a special flower.” 

But in the wake of the recession, millennials continue to struggle. And they are not as quick to risk their money in the stock market as some might assume. recent data from shows that nearly 40 percent of millennials between the ages of 18 to 29 choose cash as their preferred way to invest money that they want to save for the next decade, Time magazine reports,. By way of comparison, that’s three times the percentage that would opt for stocks. 

Even more surprising is that the average household headed by someone 35-years-old or younger had just $5,500 worth of financial assets. The major takeaway is that millennials don’t have much money to invest. At least, not at the moment. 

Of course, socially responsible investing is not a new idea, and Lupei will be competing with established funds from socially responsible mutual funds of Calvert, Pax World and Domini, with their big marketing budgets and name recognition. But he plans to offer something the large SRI funds don’t—a high level of customization. 

For most people, it takes half a lifetime of assiduous saving to amass a portfolio large enough to merit individual attention from a skilled investment advisor who can hand pick your stocks. But Lupei’s sense is that his generation doesn’t want to wait that long. 

“If you are a high-net-worth individual, or have an account worth one million dollars, there are financial advisors who would happily work with you and remove certain stocks from your portfolio,” said Lupei, “but up until that point, there just aren’t a lot of options.” 

Related: The New Playbook That Taps a $200 Billion Millennial Market 

So, he constructed online “filters” designed to allow his clients to screen out companies they don’t want to support, whether that’s firearms manufacturers, alcohol distributors, or casinos. Investors can also search for companies that have a positive record of diversity, offering a living wage, or women on the board. 

He also hopes to attract investors with low fees. He says he charges 0.6 percent of total assets annually, less than half the average 1.3 percent of his bigger competitors. And unlike most of the more established companies, Lupei allows investors to open an account with as little as $500.  

Lupei tells a compelling story, but his company obviously has a long road ahead. 

Valued Investing is less than a year old and since it started welcoming new clients in mid-June, the company is now managing 22 clients and $36,000 in assets. Lupei is encouraged by the enthusiasm of these earliest adopters, and is aiming to grow the company to $1 million in Assets Under Management (AUM) by the end of August. 

Related: How You Might Qualify for Student Loan Forgiveness 

And he plans to do it by working through channels millennials trust. 

But beyond that, he sees huge growth potential. 

As millennials get jobs and experience, their net worth will skyrocket in the next decade. Plus, many of them will inherit money from their parents. A recent World Economic Forum report contained stunning numbers: “Over the next 40 years, Generation X and the Millennial Generation will potentially inherit an estimated $41 trillion from the Baby Boomer Generation.” 

And Lupei sees an opportunity to capitalize on that. 

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