Trillion-dollar wealth transfer threatens traditional banks

An estimated wealth transfer of over $60 trillion from the baby boomer generation to younger generations is expected. Young investors' shift toward alternative assets threatens the traditional banking model.

A historic wealth transfer known as the 'Great Wealth Transfer' is underway, alarming global banks and asset management companies. Wealth worth tens of trillions of dollars is expected to pass from the baby boomer generation (born 1946-1964) to younger generations.

According to a Financial Times report based on Cerulli Associates data, over $60 trillion in wealth will pass into the hands of younger people in the US alone by 2048. Bloomberg, citing a Henley & Partners report, reports that $85 billion will be inherited in South Africa over the next decade; more than 40% of the country’s wealthy individuals are over 60.

Structural Reasons

Experts attribute this transformation to the different economic experiences of the new generation, who grew up after the 2008 global financial crisis. Rather than stocks and traditional bonds, young investors are turning to bolder investments.

According to a Bank of America survey of wealthy US investors, 90% of those aged 21-45 prefer to invest in alternative assets such as private equity and real estate. Among baby boomers, this rate is only 15%.

Young people are also moving away from traditional financial advisors by using digital platforms such as Revolut or Wealthfront, which offer lower-cost and faster services. Cryptocurrencies have also become one of the most pronounced points of divergence between generations.

Challenges

According to the Financial Times, this shift threatens traditional banks and asset management companies that rely on long-standing client relationships. One family interviewed by the newspaper demanded that their long-time private advisor be replaced with one 'more suited to their generation'.

Data from the French firm Capgemini shows that traditional banks and asset managers lost approximately $1.5 trillion in assets under management between 2022 and 2025. The same data indicates that wealthy clients turned to new players offering more flexible and technology-focused services during the same period.

Bloomberg also notes that the wealth transfer is triggering serious succession disputes in family businesses. As founders depart, the future of companies whose success depends on individuals is being questioned, while the ability of heirs and professional management to sustain these companies is seen as critical.

Banks' Response

The Financial Times writes that major financial institutions are moving to adapt to this change. Morgan Stanley acquired the Equity Zen platform for trading private company shares, while Charles Schwab absorbed Forge Global.

Banks are spending billions of dollars on developing technology and artificial intelligence, and improving their digital applications. They are also offering specialized financial education and events for the children of wealthy families in an effort to build early connections with the new generation.

However, Capgemini's global survey shows that these efforts do not guarantee client loyalty. As of 2025, the share of wealthy clients working with a single financial institution has fallen to 19%, while the number of those distributing their money among four to six institutions is rising.

Industry officials interviewed by the Financial Times emphasize that the new generation is not only looking for different financial products, but also wants advisors who understand and share their digital culture. Competition in the coming decades is expected to revolve around the ability to convince young heirs that traditional institutions can still keep up with the times.