A historic transfer of wealth is already reshaping the global economy as trillions of dollars move from aging baby boomers and self-made entrepreneurs to their children and grandchildren.
According to a recent report by UBS, an estimated $83.5 trillion will be transferred between generations over the next two decades, making it the largest wealth transfer in modern history. Billionaire families alone are expected to pass down roughly $6.9 trillion by 2040.
"The world is entering a historic intergenerational wealth transfer," UBS said in findings cited by CNBC. The transition is expected to have significant implications for investment markets, luxury industries, real estate, and family businesses as younger heirs bring different priorities and financial philosophies than the generations that accumulated the wealth.
First-generation wealth creators often built fortunes through family-owned companies, commercial real estate holdings, or investments in local blue-chip stocks. "The first generation were builders," said Elizabeth Hart, founder and CEO of Legacy Wealth Advisors. "Their wealth is usually tied to a single asset class they understand deeply, often a family operating business or local blue-chip shares."
Younger heirs, however, tend to have a more international outlook. Many have studied abroad, traveled extensively, and gained exposure to global financial markets. As a result, they are increasingly diversifying inherited fortunes across different sectors and asset classes.
That trend is already challenging traditional investment patterns. In many parts of Asia, for example, wealthy families have historically favored property investments as a primary store of wealth. According to Hart, second- and third-generation heirs are increasingly moving away from an almost exclusive focus on real estate and exploring broader opportunities in private markets, technology investments, and international assets.
A survey conducted by Natixis Investment Managers found that younger investors are considerably more interested in alternative investments than older generations. More than half of millennials surveyed expressed interest in private assets, while 62% reported discussing cryptocurrencies with financial advisers. Additionally, 44% said they planned to increase or begin investing in crypto within the next year.
The data also suggests that younger investors are more willing to embrace risk. In the Asia-Pacific region, 78% of millennials said they sought opportunities to outperform the market, compared with just 38% of baby boomers willing to take additional risks for higher returns.
Financial advisers say the shift reflects a broader change in attitudes toward money itself. "For most elder people, money is a thing, and money is good for more. For most younger ones, money is just a tool," said Tobias Prestel, founder of Prestel & Partner. "They are more looking into how the tool is used than enjoying the treasure chest."
That philosophy is also influencing spending habits. Rather than focusing on traditional symbols of wealth such as luxury car collections, younger affluent individuals are increasingly prioritizing travel experiences and global mobility. Some are purchasing homes in multiple countries, combining lifestyle goals with investment strategies.
Sustainability is also emerging as a key consideration. UBS found that nearly half of next-generation investors are already involved in or interested in learning more about impact investing and sustainable investment strategies, signaling growing demand for portfolios that align with environmental and social goals.
