The largest wealth transfer in modern history is underway. Heirs are expected to use future trillions in family assets very differently from the generation that built them.
According to UBS, about $83.5 trillion is expected to pass from baby boomers and older entrepreneurs to their children and grandchildren over the next two decades.
UBS told CNBC: “The world is entering a historic generational wealth transfer.” Of that total, wealthy billionaire families are expected to transfer about $6.9 trillion by 2040.
For many families, the first generation often built wealth in areas they knew best: family businesses, real estate or local blue-chip stocks. Wealth advisers told CNBC that the next generation is shaped by broader forces: more of them study abroad, are more internationally mobile and are more open to diversified investing.
Legacy Wealth Advisors founder and CEO Elizabeth Hart said: “The first generation are more like builders. Their wealth is usually tied to one asset class they know deeply, such as a family business or local blue-chip stocks.”
By contrast, younger heirs tend to view wealth through a more global lens. Hart added that they are more willing to spread money across asset classes and markets.
That shift could move part of inherited wealth out of the traditional family capital pool, especially real estate. Hart said Asian families spent generations putting almost everything into property, but second- and third-generation heirs are increasingly diversifying into other assets and geographies.
A Natixis Investment Managers survey found that, compared with older investors, millennials are more likely to seek exposure to private assets such as private equity: 53% said they were interested. They also bring up crypto more often with advisers: 62% said they had discussed crypto with an adviser, and 44% planned to increase or start crypto investing in the next year.
Younger investors are also more comfortable with risk. Natixis found that in Asia-Pacific, 78% of millennials want a chance to outperform the market, while only 38% of baby boomers are willing to take risk in pursuit of that goal.
Money is seen as a means, not an end
Tobias Prestel, founder of Prestel & Partner, said younger wealth holders increasingly see money as a tool to achieve goals, rather than the end point of wealth itself.
Prestel said: “For most older people, money is a thing, and more is better; for most younger people, money is just a tool. They care more about how to use the tool than about enjoying the treasure chest.”
That mindset is also changing spending habits. Instead of collecting status symbols in the traditional way, some younger heirs place more value on experiences, liquidity and a global lifestyle. Prestel said that rather than collecting cars, younger wealthy people are more likely to own homes around the world, combining travel with global real estate allocation.
Interest in sustainable and impact investing is also rising. UBS said nearly half of next-generation investors are already investing in, or want to learn more about, impact and sustainable investing.
Wealth transfer is also changing how families manage assets. UBS found that younger family members increasingly see inheritance as a transfer of responsibility, not simply a financial windfall.
One respondent told UBS: “My brother and I don’t see inheritance as something we are going to get, but as something we are responsible for doing for our father — to do it as well as possible.”
Still, the transition is not without risk.
Advisers say the sheer size of the handoff is unlikely to stall the broader transfer of wealth, but the biggest risk to preserving wealth often comes from within the family.
Hart of Legacy Wealth Advisors said: “The cracks are not about not having money. They are about not having communication.”
Many first-generation wealth creators are reluctant to let go, especially in Asia, where family wealth is often tied closely to one elder in the family. At the same time, heirs are pushing for greater transparency, succession planning and formal governance around family assets.
Hart added: “Even with a succession plan, the biggest destroyer of wealth is still family conflict.”
As wealth moves from founders to heirs, advisers say a successful transfer depends more and more on preparing heirs to be stewards and trustees, not just on the asset structure itself.
