The Shifting Sands of Ultra-Wealth: A Generational Transition
A new report from Altrata reveals a important generational shift underway within the world’s ultra-wealthy population – those with $30 million or more in assets. Currently, baby boomers and the “silent generation” (those born in 1945 or earlier) control the vast majority of this wealth, representing a combined 67% 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 landscape 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 share held by baby boomers and the silent generation will shrink drastically, falling from over two-thirds to just a fifth.Generation X is expected to become the dominant demographic, claiming 45% of the ultra-wealthy share.
This transition has significant implications for businesses catering to high-net-worth individuals, including wealth managers, art dealers, and non-profit organizations. “They really have to think ahead as 15 years is not actually that far away,” notes Maya Imberg, head of thought leadership and analytics at Altrata. “Are environmentally 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 bottom line of businesses.”
The acceleration of this wealth transfer is partly attributed to the increasing use of trusts and family offices,which allow wealth to be passed to heirs earlier than traditional inheritance methods. “That means younger people are able to 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 their wealth and their current professional focus. Younger ultra-wealthy individuals are more likely to have built their fortunes in the same industries where they currently work. Notably, 15% of the next generation derives wealth from hospitality and entertainment - significantly higher than the under 5% seen in older generations. Technology is also a prominent sector for younger ultra-wealthy individuals, with nearly 9% focusing on the industry, double 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 focus,10 percentage points lower than the average. This reflects the rise of tech companies creating new millionaires, 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 that are less liquid and require more capital. Real estate also constitutes a larger portion of the wealth of the next generation, representing nearly a quarter of their portfolios, and they have a lower median 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 to be downsizing. As Shaban puts it, “It’s a different life cycle.”
