Generational Wealth Battle: Insights from BofA’s Wealthy Americans Study

Recent insights reveal a fascinating shift among younger high-net-worth investors that could redefine the investment landscape:

• Only 47% of their portfolios are tied up in traditional stocks and bonds—starkly lower than the 74% seen in investors over 44.
• A surprising 17% is funneled into alternative investments, a significant jump from the mere 5% among older cohorts. In fact, a whopping 93% are planning to increase their stakes in alternatives in the coming years.
• Nearly half (49%) are diving into the cryptocurrency wave, with an additional 38% expressing curiosity. They view cryptocurrency as a prime area for growth, second only to real estate.
• Gold is still glittering, with 45% owning physical gold and another 45% keen on acquiring it. Overall, 41% of the affluent either own (18%) or wish to own (23%) this timeless asset.

While the intention to share and sustain family wealth is commendable, pitfalls in planning, communication, and guidance can derail those good intentions:

• A staggering one in five have felt the strain of inheritance issues, with 54% of younger respondents bearing the brunt.
• Shockingly, 52% of wealthy Americans lack the essential components of an estate plan—a will, an advanced healthcare directive, and a durable power of attorney.
• Almost half (48%) have overlooked hard assets like real estate, art, and collectibles in their estate strategies.
• Even though 56% have established trusts, only 27% fully grasp their advantages and workings.
• 69% of parents with adult children are discussing family wealth plans, but these crucial conversations typically start only after their kids hit 31.

When it comes to giving back, a strong sense of responsibility fuels the wealthy’s philanthropic endeavors (52%), while a desire to leave a positive legacy motivates 40%. However, their charitable focuses and passions, such as art and collectibles, differ significantly across generations:

• A remarkable 91% embrace philanthropy, with younger donors nearly twice as likely to support causes like homelessness (41%), social justice (33%), and climate change (32%) compared to older generations (21%, 18%, and 17%, respectively).
• 40% of the wealthy express interest in art collections, with a striking 83% of millennials and Gen Z eager to explore this avenue.
• Collectors are thriving, with 65% of respondents, including 94% under 44, expressing interest in collectibles. Millennials and Gen Z are at least twice as likely to collect watches (46%), fine wines (36%), rare cars (32%), sneakers (30%), and antiques (30%).

As the “Great Wealth Transfer” unfolds, women are set to control more wealth than ever before. Over the next decade, an astounding $30 trillion in U.S. wealth will transition into women’s hands, shaping financial decisions and philanthropic initiatives like never before.

For a deeper dive into these compelling insights, explore the latest findings in the 2024 Wealth Study.

Conducted by an independent market research firm, this comprehensive online survey gathered insights from 1,007 high-net-worth individuals across the U.S. All respondents were at least 21 years old and possessed a minimum of $3 million in investable assets, excluding their primary residences. With a margin of error of +/- 3, this study offers a nationally representative look at the affluent population.

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