The financial wealth of all U.S. households at the end of 2024 exceeded an estimated $90 trillion, a 16% year-over-year increase, according to a report released Wednesday by Cerulli Associates.
This growth occurred across the wealth spectrum but was especially prominent among high-net-worth households with the greatest relative exposure to soaring U.S. equity markets.
Last year, households with $5 million or more in financial assets controlled an estimated $49 trillion of financial wealth, or 54% of the overall total. This group of households numbers 3.4 million, including upward of 100,000 with financial wealth of more than $50 million.
As the high- and ultra-high-net-worth market grows and looks for services such as estate planning, family offices and trust management, it will become increasingly competitive for providers, according to John McKenna, a Cerulli research analyst. They will need to examine these service offerings to progress multimillionaire clients through their advice relationship to this next level, or risk losing them to firms with a renewed commitment to the segment.
Cerulli’s research shows that as the wealthiest categories grow, market share has receded among the affluent (those with $2 million to $5 million) and mass affluent ($500,000 to $2 million) segments. Together, these markets comprise an estimated 36% of households, down from 38% at year-end 2023.
Retirement assets remain the largest asset class among mass affluent customers, estimated at $32 trillion, according to the report. Some $17 trillion of it is held in individual retirement accounts and $12 trillion in defined contribution plans, while $3 trillion remains in funds that households still hold with previous employers.
Retirement accounts under previous employers are an opportunity for advisors to bring in these assets through IRA rollovers or guaranteed income plans, McKenna said.
“For households in their 60s, many of whom will be in retirement and have nearly $2 trillion in these accounts, rolling these assets into an IRA or a guaranteed income plan can provide greater investment and income flexibility while consolidating assets for more efficient and simplified investment management,” he said.
Several firms have begun to build out their wealth management capabilities to reach mass-affluent clients, confirming the growing interest in this wealth tier for personalized advice, the report said.
Eighty-one percent of households with $250,000 to $500,000 in financial assets say they would like access to an advisor. Cerulli noted that this cohort is typically at an asset tier where formal financial advice begins to make the most financial sense for the household.
“Since retirement plan participants are there by default through their employers, these firms have an incumbency advantage for investors with enough financial assets to merit a full-service advisory relationship,” McKenna said. “Targeted outreach to these clients based on age and/or asset levels can yield significant conversion rates of clients from 401(k) holders to full-service advisory relationships.”
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