I In Numbers: Following The Generational Wealth Of The Rich

Money

In Numbers: Following The Generational Wealth Of The Rich

Wealth enhancement, preservation, and succession are crucial parts of family planning for wealthy individuals and their families. The degree to which wealth holdings are self-made or shaped by inheritance can also substantially impact the next generation’s outlook and priorities.

Data by Wealth-X forecasts that $18.3 trillion of collective wealth will be transferred to the next generation by those with $5 million or more—known as very high net worth (VHNW) individuals—in net worth by 2030. The estimate stands nearly seven times the market capitalization of Apple, the world’s most valuable company at $2.65 trillion, as of August 10, 2022. This wealth transfer breaks down to an average of $27 million transferred by almost 680,000 individuals globally.

The research revealed that those passing on wealth are 90% men, most between the ages of 70 and 80. At least twothirds of these donors have generated their own fortunes without the help of inheritance. Sports and philanthropy are these self-made donors’ most popular interests. From global tax reforms to the vast availability of impact investment vehicles, global philanthropic activity among the wealthy has seen an upward trend over the past decade, with education being the most popular cause. In comparison, there’s a very strong commitment to the environment and conservation among the younger wealthy generation, but this is estimated to take time to emerge in wealth transfer planning.

Geographically, North America is estimated to account for 60% of the cumulative wealth transferred by 2030 at $10.6 trillion. It is the U.S. that leads as the home for the most billionaires in the world, with 735 billionaires worth a collective $4.7 trillion according to Forbes estimates as of March 11, 2022. In second place, Europe’s wealthy will pass on $3.6 trillion by 2030, accounting for 15% of all wealth transfers. LVMH’s Bernard Arnault is the world’s richest family, with a $170.7 billion fortune as of August 10, 2022. The Frenchman has five children, four of whom work in corners of the LVMH empire.

Third-ranked Asia is expected to transfer $2.5 trillion of wealth. Although Asia has a higher amount of VHNW and ultra-high net worth (UHNW) individuals—those with over $30 million in net worth—than Europe, the average age of wealthy people in many Asian countries is significantly younger than in most other regions. As such, it may take several decades before a primary stake of these wealth holdings will be transferred. For context, China produced 62 new billionaires over the past year, including two from Hong Kong, the most of any country.

The Middle East follows fourth, with 3.3% in the next largest share of wealth transfers. The data forecasts nearly 19,100 individuals will transfer an average of $604 billion in fortune by 2030.

At the very top of the wealth pyramid, around 1,200 billionaires are predicted to redistribute their wealth by 2030. Despite only accounting for 0.2% of the total number of wealth transfers, their movement will result in 20% of the collective net worth being passed on.

North America

Europe

Asia

Middle East

Latin America and the Caribbean

Pacific

Africa Total Wealth To Be Passed On To The Next Generation By 2030

By VHNWs with $5M- $30M By UHNWs with $30M-$100M By UHNWs with $100M+

$4.2T $2.3T $4.04T

$859B $509B $2.2T $647B $298B $1.6T

$164B $105B $335B $107B $65B $345B $92B $63B $117B $78B $48B $96B