Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 560

Where Baby Boomer wealth will end up

Within five years, all Baby Boomers will be eligible for retirement and the Boomer ‘bubble’ will have all but deflated out of the workforce by 2028. This demographic shift will have profound consequences for the financial industry and advisers.

A Productivity Commission paper, released in 2021, estimated that the transfer of inherited assets at about A$120 billion per year, and this figure is expected to grow to almost A$500 billion per year over the next 25 years.

The same research also found that the average age of inheritors is 50 years old, close to the mid-point of the age bracket corresponding with Gen X, which makes them an important part of the answer to the question about who will inherit the bulk of the baby boomer wealth.

Likely beneficiaries

Research suggests where money may be directed. The Future of Legacy Giving: Boomers and Beyond – Australia (November 2023), found that Baby Boomers and Gen X felt strongly that it was important to help others in need as well as your own family (55% and 61% respectively) and had a higher expectation that their family will need financial support from them (19% and 38% respectively).

Of arguably greater consequence, there also appears to be evidence that females will be the primary beneficiaries of financial flows from the transfer.

The report cites research commissioned by Schroders and McKinsey (UK and US respectively) suggests females will be the primary beneficiaries of the wealth transfer, inheriting 60% to 70% of the wealth transferred, this decade. As women statistically live longer than men on average, it’s not inconceivable they will have full control of their family wealth at some point.

All in all, it seems females are set to play a significant role in how the intergenerational wealth transfer will play out and this will likely have a profound impact on the adviser-client relationship and the advice industry overall. Whether the industry has adapted or is ready to is a different question.

Implications for financial advisers

According to The Value Gap, a report from Effortless Engagement, over 70% of clients would like their adviser to advise their children, though it may not be a fait accompli that children will use their parents’ preferred adviser. Overseas research suggests that many inheritors change their advisers.

Accordingly, working with clients to extend conversations about transfers to beneficiaries and including them in conversations, should be a key priority for the industry.

For advisers, Australian Ethical found in its 2023 Opportunity Next report, conducted with CoreData, that an overwhelming majority (77%) of advisers who engaged children in wealth transfer conversation, saw an increase in client satisfaction.

Education directly addresses a general need across generations but particularly for younger beneficiaries. Advisers are increasingly leveraging digital channels to help beneficiaries better understand the transfer and investment process and how decisions will impact them.

Advisers can also take advantage of new client portal and reporting technologies to be better informed as to the composition and performance of their portfolios and help strengthen communication and trust between transfer stakeholders.

Technology key

While the intergenerational transfer of wealth presents a substantial opportunity for advisers to engage clients and beneficiaries to establish resilient, long-term revenue streams, success is predicated heavily on their ability to add value as well as serve them profitably.

Naturally, technology is part of the answer. Modern and fully-featured trading platforms provide advisers access to the wide range of markets and asset classes required to build bespoke client portfolios in precise alignment with their objectives and risk profiles.

The net effect and arguably a key role of technology through the wealth transfer is to help address the challenges of communication and trust as root causes of transfer, ensuring there is a common and mutually agreed fact-base for stakeholders in order to deliver transfer plans their best chance of success.

At the same time, technology can help deliver significant operational efficiencies to a practice, allowing them to navigate the challenges and take advantage of the opportunities from the intergenerational wealth transfer.

Adapting to change

Investors and the wealth management industry has always adapted quickly to new technologies to improve products and services.

Our industry has, and will continue to be able to, deal with change. It is just happening faster and with higher impact than many realise.

With the older generations about to leave the system, the younger generations face different challenges than those that came before them, and the transition to innovation in the digital world is continuing apace.

The wealth management industry and equity capital markets are proven at adapting to help the economy find new ways to create capital and increase wealth. It is essential that industry participants become more active in understanding and discussing the changes that are now taking place and engage across the value chain to plan and execute change.

Industry participants need to accelerate their preparations for intergenerational transfer, as the Baby Boomer boom is over.

The full research paper on this topic can be found at: https://www.ausiex.com.au/media/202227/2024-ausiex-intergenerational-wealth-transfer-rgb.pdf.

 

Te Okeroa is Head of Sales, Trading and Customer Relationships at AUSIEX. This information contains general information only and has been prepared without taking into account your objectives, financial situation or needs.

 

  •   15 May 2024
  • 7
  •      
  •   
7 Comments
Ruth Henderson
May 16, 2024

It's difficult because of the privacy laws.

Andrew Smith
May 17, 2024

Relevant, but one would suggest that the baby boomer cohort will not disappear, but with remaining oldies account for a whopping 7+ million of the population vs. media focus on mislabelled temporary 'immigrants' i.e. students, who are 'net financial contributors'.

This will impact assets, tax income and budgets till mid century as we near the start of the 'big die off', mother lode of demographic change in permanent population.

One thinks our retirement income system i.e. hybrid means tested pension &/or super, according to offshore analysis, continues to rank in top 5 globally for sustainability versus nations using a social security insurance subscription, linked to years employment, leading to fund shortfalls etc., as working age declines.

Lex
May 17, 2024

I’m 74 and still working with my own business. Furthermore, I am working with my daughter. As for 2028 all but gone - not I!

John
May 18, 2024

Ruth is right. Also a fin advisor is not needed to work out any of the wealth transfer issues

Chris
June 22, 2024

"what are the implications for the wealth management industry"; well, shock and horror, financial planners MIGHT actually need to engage with Gen X. My personal experience has been that they don't unless they are also Gen X.

Jack Smith
October 17, 2024

I've heard that the median amount of wealth transferred is quite low, because there is a concentration of wealth in a small cohort. If that is true, then all this is moot.

Sam
January 03, 2025

As financial advisors rarely have understanding of crypto, they will become mostly redundant to the needs of younger generations that inherit this wealth

 

Leave a Comment:

RELATED ARTICLES

Super is catching up, but ageing is a triple-threat

Investment bonds for intergenerational wealth transfer

The three key drivers of a purposeful retirement

banner

Most viewed in recent weeks

Noel Whittaker’s take on the budget

Marketed as a fix for inequality and housing affordability, the latest budget instead delivers a tangle of tax changes that leave everyday Australians worse off.

Australia has no death duties. Technically.

Australia may not levy formal death duties, but a growing web of tax measures is quietly shaping what wealth passes between generations. Now, the 2026 budget adds another layer.

How to minimise tax with a will

Inheritance tax implications in Australia may surprise some, as poor estate planning without proper wills or trusts can lead to costly tax bills and delays for beneficiaries.

Testamentary trusts post-budget: Estate planning, tax reform and the ‘death tax’ debate

Proposed Budget changes to taxation are casting new uncertainty over testamentary trusts, prompting closer scrutiny of estate planning structures and the real implications of reforms still taking shape.

Back to the future - Why indexing CGT is a good idea

A return to indexation of capital gains would be a fairer way to compensate households for the effects of inflation than the current discount. Importantly, it opens the door to future, broader reforms to stop the taxation of inflation.

The investment mistake killing your returns

Retail investors face an increasingly complex product environment, but simplicity may be the most overlooked advantage in building a portfolio you can actually live with.

Latest Updates

Investment strategies

Choose your hedges wisely… and often

A new market regime is exposing the fragility of static hedges. With correlations shifting and safe havens flipping, investors must rethink diversification and adopt more adaptive tools to protect capital.

Investment strategies

Yields take centre stage again

The Australian credit landscape is shifting. Yields are rising, issuance is strong and spreads continue to tighten. Income is re‑emerging as the dominant driver of returns, though pockets of risk may be building beneath the surface.

Investment strategies

The grass is always greener: Rethinking Australian vs global equities

Australia's once‑dominant sharemarket is losing ground as others surge ahead, prompting investors to question home‑bias instincts. Meanwhile, the US market appears attractive. Is it time to revisit your global equity allocation?

Investment strategies

Stop asking if there's a stock market bubble. Ask this instead.

Markets continue to push onwards despite valuations looking stretched by historical standards. Bubble talk is rampant, however investors may be focusing on the wrong thing. The real story sits deeper than the headlines.

Taxation

The GST cannot stop inflation

Raising the GST when inflation jumps sounds clever on paper, until we examine how it may play out in practice. What is pitched as a simple inflation fix can lead to a sharp turn in the wrong direction for prices.

Shares

Why SpaceX is coming to your super fund

SpaceX’s blockbuster debut is grabbing headlines, but the real story for Australian investors is much quieter. Giant listings eventually filter into super funds and ETFs, subtly reshaping portfolios long before most realise.

Taxation

Is the government being honest with us about its business CGT changes?

The government’s assurances on small‑business concessions don’t withstand the scrutiny. Token carve‑outs and a lack of credible rationale for CGT changes may reshape how Australia rewards long‑term value creation. 

Sponsors

Alliances

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.