A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
The $100 trillion wealth transfer from older to younger generations is set to reshape the wealth management industry, as younger investors plan to move their money to new advisors, according to a new report.
A new survey from Capgemini shows that 81% of “next generation millionaires,” or those set to inherit large wealth from their families, plan to replace their parents’ wealth management firms. Most cited poor digital offerings or a lack of services and products.
“We were staggered when our research came back with that number,” said Kartik Ramakrishnan, CEO of financial services at Capgemini. “What that generation looks for is different from what that previous generations have looked for.”
Understanding the next generation of inheritors will become increasingly critical to wealth managers as a historic transfer of wealth gets underway. According to Cerulli Associates, more than $100 trillion is expected to flow from baby boomers and older generations to heirs and spouses. A majority of the transfers (over $60 trillion) will come from millionaires and billionaires, representing the top 2% of households by wealth. And most of the flows will be in the U.S.
