Wealth companies need to adapt to increased appetite for alternative investments, sustainable projects and philanthropy.
Wealth managers must risk rapidly evolving their digital and investment offerings and losing a significant portion of their future client base, Capgemini warns. According to the consultants, the wealth management industry is at the pinnacle of unprecedented generational change, with an estimated 83.5 tonnes of wealth planned to be transferred between generations by 2048.
The urgency of transformation is immediate. “Some of this is really imminent,” says Gareth Wilson of Capgemini, a global banking leader based in London. By 2030, more than a third of these assets have changed hands.
The heirs of this wealth span X, millennials and ZZ, bringing clear perspectives and expectations. Their outlook is characterized by a strong preference for digital engagement and personalized services. Wilson highlights the risk that “the existing capabilities that exist in wealth management companies do not necessarily provide that experience and do not provide the breadth of services and products that future generations will need.”
This challenge goes beyond client expectations and extends to internal hurdles within the asset management company. According to Capgemini’s latest World Wealth Report, 47% of relationship managers (RMSs) have expressed their dissatisfaction with the digital tools and technologies they currently have at their disposal. This internal complaint can have great consequences for client retention and quality of service, highlighting the important needs of companies to invest in equipping RMS to be relevant to the next generation.
Alternative actions
The report shows that next-generation clients under the age of 60 are growing in desire for alternative investments, showing significant interest in assets such as private equity, private credit and digital assets. Approximately 88% of RMS said the next Gen High Net Worth client was more interested in alternatives than the so-called “baby boomers” in the ’60s.
In response, several large institutions, including Goldman Sachs and BNY Melon, have developed platforms aimed at increasing access to these asset classes.
However, Wilson warns that the rise of the private market requires education, as both investors and advisors need to fully understand the risks, liquidity constraints and complexities inherent in such investments. As a result, wealth managers are investing in education initiatives, shifting their role from simply managing assets to becoming a reliable guide.
There is also a geographical aspect to changing wealth ownership. New wealth hubs such as Singapore, Hong Kong and the United Arab Emirates are becoming increasingly influential as wealthy individuals seek opportunities for global diversification. Wilson points to “demographic changes” not only from an age and investment preferences, but also from a broader, more global outlook perspective. Tax considerations play a role, but the main motivation is the desire for growth and diversification beyond the traditional home market.
Beyond investment choices, the next generation of wealthy clients demand that they use their wealth in a way that matches their value. Sustainable investment and philanthropy are becoming more important, and clients are looking to have a positive social impact along with financial benefits. This encourages wealth managers to expand their service delivery to include environmental, social and governance strategies and philanthropic advisors.
The growing expectations of clients extend to lifestyle and experiential domains. As global wealth grows estimated 2.6% in 2025, the luxury sector is encouraging asset management companies to incorporate lifestyle management into their products, profiting from increased demand for concierge services, medical access and exclusive experience.
Basic threats
Despite these evolving opportunities, the asset management industry faces a fundamental threat: client loyalty. Capgemini’s data reveals that 81% of next-generation heirs intend to switch assets within one to two years of receiving the inheritance, primarily due to inconsistency between expectations and services offered, particularly in the breadth of digital engagement and product.
What exacerbates this challenge is the crunch of looming talent within the industry. It is expected that almost 50% of North American relations managers will retire by 2040. Many current advisors feel they are not in the capacity to meet the evolving needs of their younger clients, creating what Wilson describes as “a little perfect storm.” This intergenerational gap between advisors could widen the gap between client expectations and corporate capabilities, further accelerating the risk of client attrition.
Technology, in particular, generate artificial intelligence (AI), offers potential solutions. Wilson is optimistic about the potential for AI transformation in not only improving back office efficiency, but also revolutionizing client engagement. AI can sift through vast amounts of structured, structured and unstructured data to create hyper-personalized profiles, allowing advisors to provide more meaningful interactions with customized investment advice.
Furthermore, AI can reduce administrative burdens and free up RMS and focus on high-value client relationships by automating document management and operational tasks.
“Essentially, it’s about giving RM better information at the most appropriate point,” Wilson explains. Importantly, he emphasizes that while AI improves advisory capabilities, the human element remains essential, especially for building complex wealth management decisions and trust with clients.
