Great Wealth Transfer to open ‘new chapter’ of growth for wealth managers

The ‘Great Wealth Transfer’ will open a new chapter of structural growth for the wealth management industry, which will need to adapt to the diversity of inheritors’ profiles, according to Edmond de Rothschild.

Its Investment Research team’s latest note about the impact of the Great Wealth Transfer said that wealth managers could benefit from the sale of antiques or inherited real estate that is difficult to maintain, as beneficiaries reallocate proceeds to stocks, funds, or structured products.

The paper argued that younger generations saw investing prudently in stocks and bonds was a better way to generate wealth, and were less inclined to pass on inheritance to future generations.

Some were found to prefer to innovate, create economic opportunities, and take risks to build businesses.

These younger inheritors generally begin working with advisers earlier in their lives than other high net worth individuals (HNWI), Edmond de Rothschild said.

Sustained interest in and exposure to alternatives mean frequent engagement with advisers was the second most cited reason for people being drawn to these investments, only behind the benefits of portfolio diversification and potential returns.

Edmond de Rothschild added that the scale of the wealth transfer would open a new chapter of structural growth for wealth managers.

However, the private bank emphasised that the changing demographic profile of beneficiaries would require a transformation from the industry to capture the full potential of this new market.

"Millennials and Generation Z, in fact, show a stronger interest in non-traditional investments than older generations, who are generally less familiar with such financial products,” the note stated.

“Today’s young investors - who will inherit family wealth tomorrow - are likely not only to be more willing to invest in public markets, but also to allocate a portion of their assets to alternative asset classes such as private markets or cryptocurrencies.”

While Millennials were showing greater interest in sustainable investing, and heirs were more likely to turn to liquid assets, a degree of conservatism and respect for ‘family heirlooms’ could not be ruled out, it added.

“In the realm of luxury assets, a shift driven by social status can be observed, moving away from ‘traditional luxury’ (such as works of art) toward ‘social status luxury’, such as watches or jewellery," the note said.

“While younger members of the middle class, facing inflation and a decline in purchasing power, is likely to sell inherited assets to purchase a new home or renovate their current one, younger generations inheriting significant wealth are more inclined to retain those assets, unless a major business opportunity compels them to sell these inherited assets.”

Finally, the note highlighted that online advisory platforms and digital banks were also expected to benefit from the Great Wealth Transfer.

“In the United Kingdom, for example, TikTok is reported to have become the primary source of financial information for young people in 2026,” the private bank said.

“Young people receiving inheritances may continue to use these platforms to manage their finances and investments.”

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