Family Offices Could Play a Key Role in the ‘Great Wealth Transfer’

For years, financial advisors have been bracing for the so-called “great wealth transfer” — a cross-generational shift of cash, equities, real estate and other assets older Americans will be handing off to their heirs during the next decade. 

Just how much Boomers will be passing on to their Gen X, Millennials, Gen Z and Gen Alpha heirs is open for debate. 

While some analysts say the final handoff could be valued as high as $90 trillion, Merrill Lynch, JP Morgan and others are slightly conservative in their estimations, saying the final tally will be closer to $84 trillion.  

Not so fast, says Northwestern Mutual. The insurance giant’s 2024 Planning and Progress Study suggests the long-anticipated, multi-trillion-dollar transfer of wealth has been overblown. It determined that only a “minority of Americans are actually on track to receive a financial gift from their family members,” concluding that about 26 percent of Americans expect to leave behind an inheritance.

The reasons for this unforeseen shortfall are many. Most Americans retire earlier than anticipated, (at 62, according to the Retirement Confidence Survey.) Once retired, many still must negotiate rising healthcare and housing costs, both of which eat away at hard-earned nest eggs. Personal preferences also appear to shape windfalls. Six-in-10 American parents say their children lack their sense of fiscal responsibility; as a result, 52 percent say this “could negatively impact the family’s assets from one generation to the next.” 

Meanwhile, 4-in-10 Boomers and two-thirds of Gen X respondents tell Northwestern that they have no final will in place because many simply don’t think they will have enough assets to pass on.

These findings may come as a disappointment to financial advisors who were eager to help oversee an unprecedented bequeath of assets. But rather than being disappointed that the great wealth transfer may not live up to original projections, family office advisors should welcome the findings because they underscore the role they play in helping investors manage their assets.

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About Susan Lindeque

Susan is a visionary entrepreneur, futurist, and thought leader with over 35 years of experience in business, finance, investments, real estate, wealth creation, and technologies.

Her Massive Transformation Purpose is:

“Working to Inspire Abundance for Humanity & Invest in Exponential Technologies.”

She is the founder and CEO of Avestix, a global asset, investment, advisory, and technology company focusing on public securities, next-venture capital, commercial real estate, and alternative assets based on ESG principles.

Susan is passionate about nurturing innovation, transformation, and disruption in the new decentralized economy. She leverages her extensive network and deep industry expertise to select and empower exponential technologies that will disrupt, transform, and impact industries.

This article is for informational purposes only. All investments involve risk and some investments and investment sectors discussed may not be suitable for all investors. Please consult your financial advisor before making any investment decisions.