The Shifting Sands of Ultra-Wealth: A Generational Transition
A new report from Altrata reveals a important generational โshift underway within the world’s ultra-wealthy population – those โฃwith $30 million or more in assets. Currently, baby boomers and the “silent generation” โ(those born โin 1945 or earlier) control the vast majority โof thisโ wealth, representing a combined 67%โค of the $59.8 trillion total. Baby boomers alone hold nearly 45%, while those born before 1945 comprise 22%. Millennials and Generation Z currently represent a comparatively small 8% of the ultra-wealthy.
However, this landscapeโฃ is poised for dramatic change driven by the ongoing “great wealth transfer.” Altrata projects that by 2040, millennials and Gen Z will collectively account for over a third of the ultra-wealthy population. Simultaneously, the โshare held by baby boomers and the silent generation will shrink drastically, โขfalling from over two-thirds toโข just a fifth.Generation X is โexpected to become the dominant demographic, claiming 45% of the โultra-wealthy share.
This transition โขhas significant implications for businesses catering toโ high-net-worth individuals, including wealth managers, art dealers, and non-profit organizations. “They really have to think ahead as โ15 years is not actually that far away,” notes Maya Imberg, head of โthought leadership and analytics at Altrata. “Are โenvironmentally friendly cars going to become more critical? Are they going to be as into yachting? All of these preferences are going to have a really big impact on the โขbottomโข line of businesses.”
The acceleration of this wealth transfer is partly attributed to the increasing use of trusts โand โfamily offices,which allow wealth to be โคpassed to heirs earlier than traditional โคinheritance methods. “That means younger people are able โtoโ access that wealth. They don’t have to wait for the principal to pass away,” explains Maeen Shaban, Altrata’s director of research and analytics.
Beyond timing, a key difference between generations lies in the source of โขtheir wealth and their currentโฃ professional focus. Younger ultra-wealthy individuals are more likely to have built their fortunes in the same โindustries where they currently work. Notably, 15% of the next generation derives โwealth โคfrom hospitality and entertainment -โ significantly higher than โthe โขunder 5% seen in older โคgenerations. Technology is also a prominent sector for younger ultra-wealthy โindividuals, with nearly 9% focusing on the industry, โdouble the proportion of baby boomers. While banking and finance remains the most popular industry it accounts for just under 20% of the youngest generation’s โfocus,10 percentageโข points โขlower than theโข average. โ This reflects the rise of tech companies creating new millionaires,โข as well as the monetization of social media by influencers and celebrities.
Other generational differences include a lower prioritization of philanthropy among younger individuals, possibly due to running businesses โคthat are less liquid and โคrequireโ more capital. โข Real estateโ alsoโค constitutes a larger portion of the wealth of the next generation, representing nearly a quarter of โขtheir portfolios, and โคthey have a lower โคmedian net worth of $44 million compared to $57 million for baby boomers. the next generation is currently in an “acquisition state,” actively purchasing assets like homes and cars, while older generations are more likely toโ be downsizing. As Shaban puts โit, “It’s a different lifeโ cycle.”