What’s ahead for wealth management in the United States?

Wealth management in the United States is a huge business today. And it is about to get a lot bigger. The Deloitte Center for Financial Services expects US household assets to increase from $87 trillion today to over $140 trillion by 2030, of which nearly $64 trillion will be in investable financial assets. This means that in 2030, between $150 billion and $240 billion in wealth management fees could be up for grabs.¹

But for financial firms to fully exploit these potential opportunities, they will need a refined understanding of how this wealth will be distributed among different age cohorts. Generational segmentation is not a marketing gimmick—there is vast evidence to show that the financial, behavioral, and life-stage tendencies of different generations are meaningful and unique.



Baby Boomers, a frequent punching bag among social critics for their excesses,² will not head into the sunset quietly (see “The generations defined” by the Pew Research Center). In 2029, the year when the last Boomer will have turned 65, the US Census Bureau projects that there will still be over 61 million Boomers—about 17.2 percent of the projected US population.³ They will continue to wield immense influence over every aspect of American society for at least another two decades. As their needs and circumstances evolve, Boomers may yet again challenge conventional wisdom and redefine their role in the American economy. Financial firms would do well to take notice.

Meanwhile, Gen Xers, America’s neglected middle children, squeezed between two much larger generations,⁴ are entering the most financially rewarding stages of their lives; they will become the next big fee pool for financial services firms.

And Millennials, already seen as a segment with quirky tendencies and limitless potential, will affirm their status as the new drivers of consumption going forward. Their financial commitments (for example, education, homes, and cars) will fuel growth in the banking sector. Once they graduate to higher incomes, their share of assets will also pick up, although their lower per-capita wealth will demand differentiated service levels. However, their most pronounced impact on financial services may be driven by their value-conscious behavior and how they buy products and services, which may force a revamp of long-entrenched operating models.  (Continue Reading)

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What’s ahead for wealth management in the United States?