How Younger Generations Will Shape the Economy During the Great Wealth Transfer

The largest inter-generational wealth transfer in history is underway, with an estimated $84 trillion expected to pass from Baby Boomers to Millennials and Gen Z between 2023 and 2045. This shift is not only about the amount of wealth, but also about how younger generations will manage, invest, and use it—often in ways that differ significantly from their predecessors.

Key Trends in Wealth Transfer Management

Earlier and More Conditional Wealth Transfers

• Younger high-net-worth individuals are more likely to transfer wealth during their lifetimes, rather than waiting until after death. Millennials and Gen Xers are more than twice as likely as Boomers to want to share their wealth while alive, often to support beneficiaries directly and share experiences.

• There is a marked increase in “strings attached” to inheritances. Nearly all Millennials (97%) and Gen X (94%) include stipulations in their wealth transfer plans, such as age restrictions, spending guidelines, or requirements tied to life milestones or career performance. In contrast, only about a third of Baby Boomers do the same.

Values-Driven and Impact Investing

• Millennials and Gen Z are shifting away from traditional wealth preservation, prioritizing impact investing, ESG (Environmental, Social, Governance) factors, and philanthropy. Over 75% of Gen Z investors are willing to sacrifice returns for investments aligned with their values, such as social and societal revitalization investing.

• Alternative investments—such as private equity, real estate, and commodities—are favored by 80% of young investors, who now allocate less to traditional stocks and bonds than previous generations.

Technology Integration and Hyper-Personalization

• Younger generations expect AI-driven, personalized wealth management platforms that deliver real-time, tailored recommendations based on their unique goals and risk profiles.

• Digital assets, including cryptocurrencies and blockchain-based solutions, are becoming mainstream in their portfolios.

Emphasis on Financial Education and Communication

• Despite their digital fluency, financial literacy rates among Millennials and Gen Z remain below 50% globally. Families and financial institutions are responding by integrating financial education into digital platforms and encouraging open discussions about wealth and estate planning.

• Families that actively educate heirs in financial literacy and wealth psychology reduce the risk of wealth dissipation by 32%.

Diversification of Inheritance Types

• Inheritances are expected to include not just cash, but also real estate (62%), vehicles, investments, and business ownership stakes. This diversification requires more sophisticated management and planning.

Younger generations are set to manage the generational wealth transfer with a distinct approach: emphasizing values-based investing, technology, and personalization, while placing greater conditions on inheritances and demanding transparency and education. Their success will depend on their ability to adapt, educate themselves, and leverage both traditional and innovative financial strategies to steward and grow the wealth they inherit.

At FCD Invest, we are dedicated to cultivating the next generation of discerning heirs through bespoke education in wealth stewardship. Our holistic approach empowers inheritors to not only preserve their legacy but also to embrace a sophisticated lifestyle as they pursue their philanthropic passions, ensuring their prosperity endures for generations to come.

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