Next-generation wealth transfer reshapes gold and asset allocation

The largest wealth transfer in modern history is underway, and the next generation set to inherit trillions in family wealth will likely use it very differently from the generation that created it.

According to UBS, about $83.5 trillion is expected to pass from baby boomers and older entrepreneurs to their children and grandchildren over the next two decades.

“The world is entering an unprecedented intergenerational wealth transfer,” UBS told CNBC. Billionaire families alone are expected to transfer about $6.9 trillion by 2040.

For many wealthy families, first-generation wealth is typically concentrated in familiar areas such as a family business, real estate or local blue-chip stocks. Wealth experts told CNBC that the next generation is more likely to have an international education, be more mobile, and stay open to a wider range of investments.

Elizabeth Hart, founder and CEO of Legacy Wealth Advisors, said: “The first generation are the builders. Their wealth is often deeply tied to one asset class, usually a family business or local blue-chip stocks.”

By contrast, Hart said younger heirs tend to view wealth through a global lens and are more willing to diversify across asset classes and markets.

This shift could pull some inherited wealth away from traditional family capital “containers,” especially real estate. Hart said Asian families have historically been “almost entirely focused on property” for generations, but second- and third-generation heirs are increasingly seeking diversification into other assets and regions.

A survey by Natixis Investment Managers found that, compared with older investors, millennials are more inclined to seek private-asset exposure, with 53% saying they are interested. Meanwhile, 62% said they would discuss cryptocurrencies with an adviser, and 44% plan to increase or begin crypto investments in the next year.

Young investors also appear more comfortable with risk. The Natixis survey found that 78% of millennials in Asia-Pacific want the chance to beat the market, while only 38% of baby boomers said they are willing to take risk to gain an edge.

From wealth as a goal to wealth as a tool

Tobias Prestel, founder of Prestel & Partner, said more young wealth holders see money as a means to an end rather than the end itself.

“For most older people, money is one thing, and money is good; for most younger people, money is just a tool,” Prestel said. “They care more about how the tool is used than about enjoying the treasure chest.”

That mindset shift also shows up in spending habits. Instead of building traditional trophy collections, some younger heirs value experiences, liquidity and an international lifestyle more highly. Prestel said that, rather than collecting cars, younger wealthy people are more likely to own homes around the world and combine travel with a global property portfolio.

Interest in sustainable and impact investing is also rising. UBS says nearly half of next-generation investors are already involved in, or interested in learning more about, impact and sustainable investing.

This wealth transfer is also changing how families manage assets. UBS found that younger family members increasingly see inheritance as the passing of responsibility, not as a future financial windfall.

One respondent told UBS: “My brother and I do not see inheritance as money we will receive, but as a responsibility we must take on: to do things well, just as our father did.”

But the transition is not without risk.

Advisers say that, although the scale of wealth handoff is huge, it usually will not disrupt the broader intergenerational transfer process, the biggest risk to keeping wealth often comes from within the family.

Hart of Legacy Wealth Advisors said: “The cracks are not because of a lack of money, but a lack of communication.”

Many first-generation wealth creators are reluctant to give up control, especially in Asia, where family wealth is often closely tied to the authority of the family elder. At the same time, heirs are pushing for greater transparency, better succession planning, and more formal governance structures around family assets.

Hart added: “Even with succession planning, the factor most likely to destroy wealth is still family dispute.”

Advisers say that as wealth moves from the founder generation to the next, successful transfer increasingly depends on preparing heirs to preserve and build on the family legacy, not just arranging the asset structure.