Hello,

The Great Wealth Transfer is officially underway. With the entirety of the ‘Baby Boomer’ generation now either retired or approaching it, their Millennial and Gen Z heirs will begin to inherit an anticipated sum of $124 trillion (give or take a few trillion) globally over the next two decades.

 

It is difficult to say what the exact amount will be or the ripple effect it will have on the broader economy. There is a growing trend among retirees to enjoy well-earned savings rather than prioritise legacy payments to their heirs. Furthermore, it’s estimated that 50% of the wealth being inherited will be concentrated in just the top 2% of families.

 

The greatest repercussions may be felt in the wealth management industry where, above all, The Great Wealth Transfer presents a massive opportunity. Studies have shown that younger generations, such as Millennials and Gen Z, are less financially literate than their elders, which is surprising for a demographic that grew up in the age of information. Financial advisors will therefore play a crucial role in ensuring their new capital is managed with appropriate care. A key aspect of this will be ensuring a smooth wealth transfer across generations: generations who have material contrasts in consumption trends, the ingestion of information, and preferred access to investment markets.

 

As always, if you wish to discuss anything in this newsletter in further detail, please do get in touch.