Preparing for the Great Wealth Transfer
Within the wealth management industry, there has been much discussion about “The Great Wealth Transfer (GWT).” The GWT generally refers to the expected and substantial shift in assets from the Baby Boomer generation to their heirs. According to the Cerulli Report-US High-Net-Worth and Ultra-High-Net-Worth Markets 2024 Report, this shift will result in approximately $100 trillion in assets being passed down to Gen X, Millennials and Gen Z by 2048.
While some believe the timeline and/or asset values of the GWT may be overblown, time will no doubt create opportunities for growth within the wealth management industry. As more firms enter or expand their wealth management presence, managers may need to adjust their offering to attract and retain clients going forward. The value proposition that worked for the Baby Boomer may not be sufficient for their heirs, and failing to adopt to this reality may encourage them to take their business elsewhere.
While asset growth is a universal goal amongst wealth clients, the means of achieving that goal may vary dramatically across generations. For example, Baby Boomers may place less emphasis on AI than subsequent generations raised on technology. Investment strategies, such as ESG and impact investing, are likely to gain greater traction with Gen X, Millennials and Gen Z than with Baby Boomers.
The “one-stop-shop” service model has also historically been less interesting to Baby Boomers than the generations that have followed. Some wealth managers seek to attract and retain clients by offering banking and lending services to their clients. Other managers offer trust, estate planning and other similar services.
WTW solutions: Delivering value to the next generation
Personal lines insurance for high-net-worth (HNW) individuals is another solution offered by some wealth managers as part of their enhanced value proposition. With the GWT, wealth managers are presented with new or expanded opportunities for growth. To enhance competitiveness, WTW can help round out wealth managers’ one-stop-shop value proposition via comprehensive portfolios of personal lines insurance for HNW individuals. Such portfolios can be tailored to HNW clients’ needs and may include:
