Trillions of dollars in wealth transfer threatens traditional banks

A wealth transfer of over 60 trillion dollars from the baby boomer generation to younger generations is expected. Young investors' shift toward alternative assets threatens the traditional banking model.

A historic wealth transfer, called the 'Great Wealth Transfer,' is worrying global banks and asset management companies. The transfer of tens of trillions of dollars from the baby boomer generation (born 1946-1964) to younger generations is expected.

According to a Financial Times report based on Cerulli Associates data, over 60 trillion dollars in wealth will pass to young people in the US alone by 2048. According to Bloomberg citing a Henley & Partners report, 85 billion dollars will be inherited in South Africa over the next decade; more than 40 percent of wealthy individuals in the country are over 60.

Structural Reasons

Experts attribute this transformation to the different economic experiences of the new generation that grew up after the 2008 global financial crisis. Young investors are turning to bolder investments instead of stocks and traditional bonds.

According to a Bank of America survey of wealthy US investors, 90 percent of those aged 21-45 prefer to invest in alternative assets such as private equity and real estate. Among the baby boomer generation, this rate remains at only 15 percent.

Young people are also moving away from traditional financial advisors by using digital platforms like Revolut or Wealthfront that offer lower-cost and faster services. Cryptocurrencies have also become one of the most prominent points of divergence between generations.

Challenges

According to the Financial Times, this transformation threatens traditional banks and asset management companies that rely on long-standing customer relationships. One family that spoke to the newspaper demanded that the private advisor they had worked with for years be replaced with an advisor 'more suited to their generation.'

Data from the French company Capgemini reveals that traditional banks and asset managers lost approximately 1.5 trillion dollars in assets under management between 2022 and 2025. It is noted that during the same period, wealthy clients turned to new players offering more flexible and technology-focused services.

Bloomberg, meanwhile, notes that the wealth transfer also brings serious succession debates in family businesses. As the future of companies whose success depends on individuals is questioned with the departure of founders, the capacity of heirs and professional management to sustain these companies is seen as critical.

Banks' Response

The Financial Times writes that major financial institutions have taken action to keep up with this change. Morgan Stanley acquired the Equity Zen platform for trading private company shares, while Charles Schwab also added Forge Global to its portfolio.

Banks are spending billions of dollars on technology and artificial intelligence development, improving their digital applications. They are also trying to build early connections with the new generation by organizing special financial education and events for the children of wealthy families.

However, Capgemini's global survey shows that these efforts do not guarantee customer loyalty. As of 2025, the proportion of wealthy clients working with a single financial institution has fallen to 19 percent, while the number of those distributing their money among four to six institutions is increasing.

Industry officials who spoke to the Financial Times emphasize that the new generation is not only looking for different financial products, but also wants advisors who understand their digital culture and think the same way. It is predicted that competition in the coming decades will revolve around the ability to convince young heirs that traditional institutions can still keep up with the times.