Wealth Solutions & Wealth Planning

IQ-EQ report reveals that USD15 trillion to be passed to Millennials, Gen X and Y in the next decade

IQ-EQ, a global investor services provider, in collaboration with Barton Consulting and Wealth-X data intelligence, has created an in-depth industry analysis on the world’s wealthiest, to establish how and when the ‘Great Global Wealth Transfer’ is expected to take place, and the impact this will have on family offices.

The research considers all individuals across the world worth more than $5 million and concludes that over 500,000 people will be transferring wealth over the next decade. This equates to more than $15 trillion – which is higher than China’s annual GDP. Regionally, 41% of this wealth will be transferred from the Americas, 32% from EMEA and 27.5% from Asia-Pacific. More importantly, for ultra-high-net-worth individuals (UHNWIs) with more than $100 million net worth, 62% of this group are over the age of 75. This suggests that within the world’s wealthiest families, the wealth transfer is likely to begin happening within the next five years. Given the modern complexities surrounding families and their assets, it is likely that the more immediate a transfer of wealth is, the higher the possibility is for problems or issues to arise without the right infrastructure in place.  

Steve Sokić, Group Head of Private Wealth, IQ-EQ, said: “Over the next decade we expect to see huge changes in asset allocation as the different investment preferences between generations is fully realised. We’re already seeing a transition towards private equity and venture capital investments, particularly in up and coming sectors such as technology. Preference towards impact investing and ESG criteria is also expected to continue in an upwards trend as sustainable investing becomes a priority for the younger generation, particularly in Europe and North America.”

“However, there is an emerging consciousness that the transfer of wealth between generations requires significant time and dedication. These individuals have complex arrangements in terms of business ownership, assets and geographic exposure – without the right structure and planning in place the outcome could be a failed transfer that could result in a disappearance of a family’s wealth,” Sokić continued.

The report also dives into five trends that will emerge from the wealth transfer.  These include:

  • The continued growth and evolution of family offices
  • The increased globalisation of wealthy families
  • Changing interest levels in certain assets and investments
  • Increased use of technology within family offices
  • The impact of Covid-19

The Great Global Wealth Transfer report can be found HERE.