It’s been coming since the end of World War II—or certainly, since the expansive “baby boom” following the war gave rise to a generation of families that developed more affluence than any before them: The biggest intergenerational movement of wealth in history is now underway; it’ll be playing out over the next two decades; and by 2045, most of the world’s wealth will be in entirely new hands. The enduring concentration of this wealth may be remarkable: Currently, the richest 1 percent holds almost half of it, and most of the great transfer will stay within its originating families. But not everything that came with this money is going with it.
As generational change gains pace, many of the outgoing cohort’s dominant understandings of what wealth is, and what it’s for, aren’t being transferred; they’re being replaced. Which means that all the assets en route to the incoming cohorts could end up being old means to very new ends. How much do we know about them?
Martin Raymond is the cofounder of The Future Laboratory, the editor in chief of LS:N Global, and the author of a new report on the great wealth transfer. To Raymond, the “rising generations” inheriting this wealth don’t merely care about different things than their predecessors—whether in their approach to investment, their consumption of luxury goods, or their outlay on experiences; they understand investment, consumption, and experience through different frameworks of meaning. Neither do they care any less about growing their wealth over time; they just see that goal through different strategic optics—determined by these frameworks of meaning. For all their cultural and political diversity, Raymond says, it’s remarkable how much the rising generations share in common globally—and in historical terms, a short matter of time before their ideas about the good life and its dependence on the right relationship to the world start noticeably reshaping it.
John Jamesen Gould: This is an immense intergenerational movement of wealth, maybe in excess of $70 trillion. Where’s it coming from? And why now?
Martin Raymond: The basic answer is death—and death. Which in this case are two slightly different things.
What we think of in the West as the postwar Baby Boomer Generation, generally defined as people born between 1946 and 1964, that 1-to-8 percent of the world’s population that controls the majority of its wealth, is starting to die—and will be largely gone over the next 20 years. In the United States, in the United Kingdom, and across Europe, but also around the world, this is a historically huge cohort. So that’s the fundamental reality as to where the assets are coming from—and why they’re starting to come now.
In the meantime, though, the high–net-worth Boomers still among us are trying to make preparations for their death—in the literal sense, of course, but also in an extended sense, being the death of their control over the wealth they’ve established and its preservation. So there’s increasing engagement among these Boomers, their financial advisers and asset managers, and their families’ younger generations.
As to the total amount, every projection will give us a somewhat different number, whether it’s $83 trillion or more, or less, but it’s generally agreed that, yes, we’re talking about a hefty sum beyond $70 trillion.
Gould: So this mass of wealth is coming from the Boomers, and it’s enormous. Where’s it going?
Raymond: It’s going disproportionately to the rising generations of Millennials, born between 1981 and ’96, and Generation Z, born from 1997. As to what’s at stake in that trajectory, one way to look at it is in terms of how Boomer wealth developed in the first place.
Boomer wealth was developed principally through investment and asset management conceived in a narrow way—as the Boomers themselves would tend to see it, in an unsentimental way. It was about focusing investment on industries, such as fossil fuels, that would maximally guarantee high rates of return, without too many questions about the long-term implications.
Today, if I chat to the head of a family office, who’s in their 60s or beyond—and I’m 61—the closer we get to the older end of their cohort, the less interested they are in questions about the long-term implications of investment; the less interested they are in ideas about sustainability, impact, or purpose; the less interested they are in the notion that we should be investing wealth for good, beyond merely for gain.
Is that a kind of selfishness, as the younger generations can see it? Perhaps, but in many ways it’s just a continuation of postwar norms on how to think about the essentials of wealth management—how to think about looking after my business, looking after my family, looking after the core things I’m responsible for.
Boomer wealth was developed principally through investment in industries that would maximally guarantee high rates of return, without too many questions about the long-term implications.
Of course, all that came in turn with things that reflected back upon oneself—the sense that I should enhance my status, that my estate is my legacy, that all of this is reflected mainly in the amount of money I pass on. So the Boomer Generation’s thinking on these matters has levels and complexity to it, but on the whole, it falls into this framework of wealth for financial gain.
Now, if that framework were simply continuing among the Millennials and Gen Z, we wouldn’t be having this conversation. We’d be talking about something else. And I should say, a lot of the transition we are talking about skips Generation X, people born from 1965 to ’80, a smaller cohort sometimes referred to as the missing generation. That would probably be you.
Gould: It is.
Raymond: And in certain respects, it even skips a sub-cohort of the Boomers, what some call Generation Jones, born between 1954 and ’64.
These generations will inherit some of this wealth—but overall, it will go to Millennials, who’re now getting into their mid-40s, and Gen Z, who’re getting into their mid-20s. And when you take them together, they represent a huge difference in thinking from the generation that’s handing things down.
Now, with these rising generations, when we’re talking about investment, we’re thinking about sustainability; we’re thinking about impact; we’re thinking about purpose. We’re thinking about an investment’s environmental, social, and ethical dimensions. In fact, these are often the first things the rising generations search out when they look to invest or manage assets—or even buy things. Where luxury goods or experiences used to be primarily about status or even personal passion, they’re now increasingly lifestyle-class assets that represent extensions of my environmental concerns, for example, my desire for positive change in the world, my sense of meaning.
Gould: You’re seeing significant intergenerational change in these ways. Are you seeing any significant intergenerational conflict about it?
Raymond: When you talk to high–net-worth financial advisers and asset managers and bankers, and so on, they together tend to speak a very different language from Millennials and Gen Zs—for obvious reasons: There’s usually a 20- or 30-year gap between them. But the advisers and managers also tend to be highly cynical about Millennials and Gen Z priorities. Interviewing these advisers and managers, when I raise the issues of sustainability, impact, purpose, they tended to be dismissive—both of the ideas and of the rising generations’ ultimate commitment to them.
With the rising generations, when we’re talking about investment, we’re thinking about sustainability; we’re thinking about impact; we’re thinking about purpose. These are often the first things they search out.
But when you speak to the younger high–net-worth people, and you look at the evidence around how they place their money—and where they place it—it supports the conclusion that they’re investing more with environmental concerns in mind, more with social concerns in mind, more in terms of how their money can do better for greater numbers of people, and more in terms of how and where that impact can be measured. As consumers, they’re spending more along these lines. And they’re involving themselves in philanthropy more along these lines too.
When you look at the priorities of Boomer philanthropists, they tended to tie philanthropy to status, to visibility, to extending their social influence within particular communities—or to particular agendas, like eventually getting an important honorary title. The younger cohort tends to be much less concerned with getting these kinds of recognition and much more concerned with seeing impact in the world aligned with their purposes.
At the same time, I think we are seeing a conversation emerging where, yes, the older and younger cohorts have very different priorities, and neither really buys the other’s worldview, but where some financial advisers and asset managers are figuring out how to create some bridges or find some common ground between them.
It’s not, after all, that Millennials or Gen Z don’t want to make money. They do want to make money. They just want to make it in a very different way, with very different kinds of results.
Gould: The set of high–net-worth people you’ve been looking at and talking to—where are they, geographically?
Raymond: Mainly in the U.S. and U.K. but also in Europe—and within Europe, we’ve looked at a few key countries: France, Germany, and Holland. But we were also able to look at the Middle East to some extent, in the United Arab Emirates, and talk to people in Asia—particularly India, Japan, and Vietnam.
Gould: And you see shared tendencies in this cohort—psychographic commonalities across their geographic diversity?
Raymond: It’s striking to me how much they seem to have in common—certainly, how common the themes are in what they want to do with their money. Despite cultural differences, despite political differences, there’s a very strong shared interest there—in environmental and sustainability issues, first and foremost, but also in a range of social issues, including poverty, public health, and gender inequality.
It’s striking how much the rising generations have in common—certainly, how common the themes are in what they want to do with their money—despite cultural differences, despite political differences.
Now of course, gender inequality is a high-level concern in, for example, the U.S., the U.K., and Europe, in a way it’s not in the U.A.E. or across the Middle East—where there are very different cultural mores and political power structures in place. But even within them, I’ve found a lot of interest in the idea of women’s education, of women’s empowerment, of investing more in women entrepreneurs—a sense that this was important for their society.
Going back to the financial advisers and asset managers, here too there’s a good deal of tension and potential for transition. When I talk to them, I hear a lot of preconceptions about cultural and political biases around the world: You know, if it’s Dubai or Riyadh, Oh, they’re not interested in sustainability; they’re not interested in any other of these social issues; they’re not interested in impact in these areas. They’re interested in status. Well, when I look at the evidence, I have to say, this is not the case. So I think this is where there’s a real disconnect between what advisers and managers are saying about wealth and what wealth is actually saying about itself.
I don’t mean that wealth no longer has any interest anywhere in fossil fuels or status or, you know, Lamborghinis. But these emerging priorities are real and global: Twenty years ago Automobili Lamborghini saw itself as intrinsically tied to fossil fuels—to petrol. They thought, it would be impossible to sell an electric Lamborghini, because the mentality of our customer is that electric vehicles are soft and lacking in muscularity, and lacking in status. Now the person who’s thinking about buying a Lamborghini is looking for the electric version, not the petrol version.
So I think what we’re seeing is that wealth is traveling on a vector that’s merging its identity with ideas about sustainability, impact, and purpose—something a lot of advisers and managers don’t yet really understand or believe in.
Gould: For all the ongoing cultural and political differences among high–net-worth people around the world, you’re seeing something like a social consensus forming on certain clusters of ideas.
Raymond: That’s a good term to describe it: a social consensus.
Again, it’s striking. It may not be entirely surprising, because the wealthy tend to travel to and from places where wealthy people travel to and from. So there’ll be patterns of shared conversation and increasingly shared understandings on these questions. Millennials and Gen Z are meanwhile developing more global connections. They’re often on social media. If you go on TikTok, for example, and you look at the number of financial advisers and wealth managers there—and the number of luxury influencers—you can see, they’re being followed by people from all over the world. So the conversation someone’s hearing in Riyadh could be the same conversation I’m hearing in London or Dublin, or you might be hearing in New York or Toronto.
Wealth is traveling on a vector that’s merging its identity with ideas about sustainability, impact, and purpose—something a lot of advisers and managers don’t yet really understand or believe in.
And again, as Millennials and Gen Z tend to see it, they’re not sacrificing anything over time for the sake of this social consensus. As much as anything, the social consensus is about where long-term value will come from and how it will be sustained—and it’s not going to be through fossil fuels or their equivalents. What’s different here is the longer-term view the rising generations are taking—and how that’s shaping their approach to investment, how it’s shaping their conceptions of luxury, and how it’s shaping their priorities in everything they deploy their money for.
When it comes to the investment component of all that, the older cohort might continue to think the younger cohort is fooling itself. But so far, the evidence suggests it’s not. For these younger people, the basic framework for investing has shifted. It’s about understanding long-term trends; it’s about operating on the right time horizon; it’s about holding your nerve.
Gould: A transfer of wealth on this scale is a transfer of power and influence. What would you say we know and don't know, at this point, about how that will affect the world—beyond the ways in which the rising generations are investing or spending their money?
Raymond: Well, I think there’s a broader significance even to that. There’s been a very popular view among the older generation of high–net-worth people, one that became important aspects of Ronald Reagan’s and Margaret Thatcher’s policy platforms in the U.S. and U.K. during the 1980s—and that’s remained, you could say, an important part of Boomer thinking since—that as I make money, the benefits of my wealth will “trickle down” into the economy, ultimately benefiting everyone around me and benefitting the world.
I don’t think Millennials and Gen Z believe this. I think they believe the greater benefit requires greater intentionality with wealth. And that introduces a new set of ideas that will shape political life variously around the world—if in ways we may not yet be able to see fully.
Part of what I see though, is that aspects of this emerging social consensus, which might have seemed progressive or left-wing until recently—or even still might, to some—are moving gradually into the political center. I think that will affect political equations, but it will also affect the style of politics—particularly in the democratic world. I think there’s the potential for a lot more political common ground among the rising generations than there has been among the Boomers—particularly amid all the partisan polarization we’ve seen in recent years. And I think there’s a good chance we’ll see not only less of a focus on ideological battles generally but more of a focus on questions of impact specifically connected to the emerging social consensus.
The older cohort might think the younger cohort is fooling itself. But for these younger people, the basic framework for investing has shifted. It’s about understanding long-term trends; it’s about operating on the right time horizon; it’s about holding your nerve.
You can see some aspects of this wealth transfer that are apt to be transformative in one way or another already happening: You can see the effects of the rising generations’ technological adaptations, for example, particularly in fintech, which allows them to check and make decisions on their assets all the time—and which, as it disrupts asset management as an industry, will distribute investment decisions in a whole new way. You can see their influence in innovations at the intersection of health and technology. You can see it at every touchpoint between their wealth and the world around it.
More women are meanwhile coming into wealth, by inheriting it or as entrepreneurs, bringing different perspectives and priorities to what they invest in—even changing the language of finance, which has traditionally been run through with a kind of hierarchical, aggressive masculinity, whether it’s asset stripping or bull markets, or what have you. More investors are coming from traditionally marginalized communities. More are coming from Africa, from Asia, from around the developing world. And they’re all bringing different perspectives and priorities too.
Gould: You see this wealth transfer taking place simultaneously now and, in full, over the next 20 years. Where do you see these major shifts you’re describing on that timeline?
Raymond: I think the urgency of the climate issue is a real accelerant here. So while you might have seen earlier generational changes taking a decade or two, or even more, I think this will be shorter, taking discernible shape within five or six years. Now, I don’t want to overstate that as something that’ll happen necessarily in an easy, linear way. I think there’ll still be market hesitancies. I think a lot of people will still be learning their way into this new world, still be learning where to place their bets, and so on. It’s going to be a complex process. But it’s happening. And the climate is accelerating it.
As somebody once said, for any great change in the world, you only have to wait 20 years because those objecting to it will have died. Whatever new disagreements and debates there might be along the way, the ones we’re talking about here are arrayed very starkly along generation lines—and one side of that line has something on its side that the other really doesn’t, which is time.
So to me, it’s likely—not inevitable, but likely—that in 20 years, a lot of the conversations we’re hearing in the world of investment now will look awkward and crabby. People will say, What were they worried about? Twenty years ago, in a project we were working on, we advised investors to put their money into wind farms, into solar, into other forms of renewable energy. I think probably 1 percent did this on the basis. And I now see that 1% at the Eden Roc in St. Tropez. And I think, Oh my God, if only I’d shut up and listen to myself, rather than keep talking, I could have made that money as well.