In 25 years, Generation X will replace baby boomers as the biggest wealth wielders.
That’s according to a Cerulli report that predicts the transfer of a total of $68 trillion in wealth over the next quarter century by nearly 45 million households.
According to the report, U.S. High-Net-Worth and Ultra-High-Net-Worth Markets 2018: Shifting Demographics of Private Wealth, boomers will account for close to 70% of those households, shifting approximately $48 trillion.
“Wealth transfer” is defined by Cerulli as “any shift of assets that occurs from one household to an heir or charitable cause either while alive or after death.” It says that the $68 trillion can be broken down into four methods of transfer: gifting to heirs inter vivos (while alive), bequeathing to heirs (at death), donating to charity inter vivos, or bequeathing to charity.
According to the report, Cerulli expects the great majority of this wealth to be transferred at death — nearly 93% — with the rest donated to charity and gifted to heirs through inter vivos giving.
“This multigenerational shift in wealth will reshape the wealth management landscape over the next quarter century and will force firms to alter their existing business models and services,” Asher Cheses, an analyst at Cerulli, said in a statement.