Estate and wealth planning experts are facing a pivotal moment. The industry is in the midst of one of the most significant demographic and economic shifts in history.

This episode of Wealth in Motion delves into the Great Wealth Transfer and why it matters.

You might be thinking that we’ve been hearing about this “Great Wealth Transfer” for quite some time.

And it’s true, but there is good reason for that! This phenomenon has significant implications for the financial services industry, estate planning and intergenerational wealth distribution, with ripple effects impacting other segments of our society at large.

A recent report from UBS revealed that billionaires have accrued more wealth through inheritance than through their business activities last year. That’s a first since they launched this report nine years ago.

Members of the boomer generation are starting to transfer their wealth to the next generations, namely to Millennials and Gen Z.

Cross-generational wealth transfers happen all the time. Why is this one different?

What makes it different and significant is its scale. It will be the largest flow of generational wealth ever witnessed. 

To give you an idea of its magnitude, consulting firm Cerulli Associates reported that $84 trillion in assets is projected to be passed on to the next generations globally over the next 20 years.

Financial services players must start engaging with them, to avoid losing the most relevant target audience of the future.

Crucially though, they must articulate a relevant and distinct offering to meet the expectations of the next generations. Their aspirations, risk appetite and approach to wealth management often differ from those of previous generations, particularly in areas such as sustainability, digital access and instant services.

Future generations of high net worth individuals will be even more tech-savvy and social media focused, likely to value opinions from sources other than technical and financial experts.

But the most alarming part is that an estimated 40% of high net worth individuals globally have not yet formalised their inheritance plan. That’s according to a recent report from UBS.

Unit-linked life insurance made in Luxembourg is well positioned to play a key role in this massive wealth transfer. It offers continuity, flexibility, portability, policyholder protection backed by the Luxembourg “Triangle of Security”, and a large investment universe, including private markets and alternative assets.

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