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A version of this article appeared for the first time in Inside Wealth Newsletter of CNBC with Robert Frank, a weekly guide to the investor and consumer with high shuttle. Register To receive future editions, directly in your reception box.
The ranks of ultra-rich world ultra-rich continue to inflate, the number of people worth at least $ 30 million reaching 510,810 at the end of June, up 5.4% since the start of the year, according to a new report by the Wealth Altrata intelligence company.
Millennials and members of generation Z represent only 8% of this class, which has a combined net value of 59.8 billions of dollars, by Altrata. Baby-boomers command the lion’s share of almost 45% and people born in 1945 or earlier represent 22%.
However, this dynamic should change quickly thanks to the great transfer of wealth, Altrata believing that the millennials and constituents of the Z generation will represent more than a third of the ultra-riche population in 2040. Meanwhile, the share held by baby boomers and the silent generation will reduce more than two thirds to a fifth and generation X will take the advantage with 45%.
This generational change has large-scale implications for companies that are aimed at ultra-rich, wealth managers to artistic concessionaires as well as non-profit organizations, according to Maya Imberg of Altrata.
“They really have to think about the future because 15 years is not so far,” said Imberg, head of enlightened leadership and analysis at Altrata. “Will environmental cars become more critical? Will they also be in yachting? All these preferences will have a great impact on business results.”
Part of this rapid growth is due to the increased use of trustees and family offices over the past decade to transmit wealth to heirs at an earlier age, Maeen Shaban from Altrata told Inside Wealth.
“This means that young people are able to access this wealth. They don’t have to wait for the director to be underway,” said research and analysis director.
Iberg said the most “austere” difference between generations lies in industries where they have made their wealth and those where they are currently working. For most ultra-rich individuals, especially the youngest, these two are one and the same thing, according to Imberg.
But 15% of the next generation derives their richness from hospitality and entertainment, while their oldest peer index less than 5%. The next generation is also the most likely (just under 9%) to have technology as an industry industry, which represents double on the part of baby boomers. While the bank and finance are the most popular industry in all generations, the part for the youngest is just under 20%, 10 percentage points lower than the average.
According to the report, these differences reflect technological companies that strike the millionaires, as well as influencers and celebrities monetizing social media.
Other shades can largely be attributed to age, such as the next generation listing philanthropy as a lower priority, as well as real estate and luxury assets constituting almost a quarter of their wealth. These young entrepreneurs generally manage companies that can be illiquid, leaving less time and money to spend in philanthropy, said Imberg.
They also have a lower average wealth with a median of $ 44 million (compared to $ 57 million for baby boomers), so real estate often constitutes a larger part of their portfolios, according to Shaban. And while baby boomers reduce the workforce, the next generation is in the mood to spend, he said.
“They are more in a state of acquisition than older generations. They always buy things. For some of them, they buy the first house, their first large car, their first holiday home or other,” he said. “It’s a different life cycle.”