Ultra-Wealthy Millennials and Gen Zers Set to Surpass Baby Boomers by 2040

What's Happening?

A report by wealth intelligence firm Altrata indicates a significant generational shift in the composition of the ultra-wealthy population. Currently, baby boomers hold nearly 45% of the wealth among individuals worth at least $30 million, while millennials and Gen Zers account for only 8%. However, by 2040, millennials and Gen Zers are expected to comprise more than a third of this affluent group, driven by the Great Wealth Transfer. Generation X is projected to lead with 45% of the wealth, while the share held by baby boomers and the silent generation will decrease to a fifth. This shift is anticipated to impact industries catering to the ultra-rich, including wealth management, art dealing, and nonprofits.

Why It's Important?

The anticipated generational shift in wealth distribution has significant implications for various sectors. As millennials and Gen Zers gain a larger share of wealth, their preferences and values, such as environmental sustainability, could reshape market demands. Businesses catering to the ultra-wealthy will need to adapt to these changing preferences to remain competitive. This transition also highlights the importance of strategic planning for wealth managers and other service providers, as they prepare for the evolving needs of a younger, more diverse affluent clientele.

What's Next?

Firms serving the ultra-wealthy must proactively adjust their strategies to accommodate the preferences of younger generations. This includes considering environmentally friendly products and services, as well as understanding the cultural and lifestyle shifts that may influence spending habits. As the Great Wealth Transfer progresses, businesses will need to innovate and align their offerings with the values of millennials and Gen Zers to capture and retain this emerging market segment.

Beyond the Headlines

The generational wealth shift may also have broader societal implications, potentially influencing philanthropic trends and social priorities. As younger generations assume greater financial power, their focus on issues such as climate change and social justice could drive increased investment in these areas. This could lead to a more socially conscious approach to wealth management and philanthropy, reflecting the evolving values of the new affluent class.