Succession

What does it mean that tens of trillions of dollars are now moving from the Baby Boomers to the Millennials and Generation Z? Martin Raymond on the causes and effects of the twenty-first century’s great wealth transfer. Recently at The Signal: Steven Cook on [what’s happening between the U.S. and Israel](. Today: What does it mean that tens of trillions of dollars are now moving from the Baby Boomers to the Millennials and Generation Z? Martin Raymond on the causes and effects of the twenty-first century’s great wealth transfer. (From Sep. 5, 2023.) Also: Vali Nasr on popular discontent in Iran with the regime and its leaders. Changing of the Guard Benjamin Ranger It’s been coming since the end of World War II—or certainly, since the expansive “baby boom” following the war gave rise to a generation of families that developed more affluence than any before them: The biggest intergenerational movement of wealth in history is now underway; it’ll be playing out over the next two decades; and by 2045, most of the world’s wealth will be in entirely new hands. The enduring concentration of this wealth may be remarkable: Currently, the richest 1 percent holds almost half of it, and most of the great transfer will stay within its originating families. But not everything that came with this money is going with it. As generational change gains pace, many of the outgoing cohort’s dominant understandings of what wealth is, and what it’s for, aren’t being transferred; they’re being replaced. Which means that all the assets en route to the incoming cohorts could end up being old means to very new ends. How much do we know about them? Martin Raymond is the cofounder of [The Future Laboratory](, the editor in chief of [LS:N Global](, and the author of a [new report]( on the great wealth transfer. To Raymond, the “rising generations” inheriting this wealth don’t merely care about different things than their predecessors—whether in their approach to investment, their consumption of luxury goods, or their outlay on experiences; they understand investment, consumption, and experience through different frameworks of meaning. Neither do they care any less about growing their wealth over time; they just see that goal through different strategic optics—determined by these frameworks of meaning. For all their cultural and political diversity, Raymond says, it’s remarkable how much the rising generations share in common globally—and in historical terms, a short matter of time before their ideas about the good life and its dependence on the right relationship to the world start noticeably reshaping it. John Jamesen Gould: This is an immense intergenerational movement of wealth, maybe in excess of $70 trillion. Where’s it coming from? And why now? Martin Raymond: The basic answer is death—and death. Which in this case are two slightly different things. Advertisement What we think of in the West as the postwar Baby Boomer Generation, generally defined as people born between 1946 and 1964, that 1-to-8 percent of the world’s population that controls the majority of its wealth, is starting to die—and will be largely gone over the next 20 years. In the United States, in the United Kingdom, and across Europe, but also around the world, this is a historically huge cohort. So that’s the fundamental reality as to where the assets are coming from—and why they’re starting to come now. In the meantime, though, the high–net-worth Boomers still among us are trying to make preparations for their death—in the literal sense, of course, but also in an extended sense, being the death of their control over the wealth they’ve established and its preservation. So there’s increasing engagement among these Boomers, their financial advisers and asset managers, and their families’ younger generations. As to the total amount, every projection will give us a somewhat different number, whether it’s $83 trillion or more, or less, but it’s generally agreed that, yes, we’re talking about a hefty sum beyond $70 trillion. Gould: So this mass of wealth is coming from the Boomers, and it’s enormous. Where’s it going? Raymond: It’s going disproportionately to the rising generations of Millennials, born between 1981 and ’96, and Generation Z, born from 1997. As to what’s at stake in that trajectory, one way to look at it is in terms of how Boomer wealth developed in the first place. Boomer wealth was developed principally through investment and asset management conceived in a narrow way—as the Boomers themselves would tend to see it, in an unsentimental way. It was about focusing investment on industries, such as fossil fuels, that would maximally guarantee high rates of return, without too many questions about the long-term implications. Today, if I chat to the head of a family office, who’s in their 60s or beyond—and I’m 61—the closer we get to the older end of their cohort, the less interested they are in questions about the long-term implications of investment; the less interested they are in ideas about sustainability, impact, or purpose; the less interested they are in the notion that we should be investing wealth for good, beyond merely for gain. Mitchell Luo More from Martin Raymond at The Signal: “… with these rising generations, when we’re talking about investment, we’re thinking about sustainability; we’re thinking about impact; we’re thinking about purpose. We’re thinking about an investment’s environmental, social, and ethical dimensions. In fact, these are often the first things the rising generations search out when they look to invest or manage assets—or even buy things. Where luxury goods or experiences used to be primarily about status or even personal passion, they’re now increasingly lifestyle-class assets that represent extensions of my environmental concerns, for example, my desire for positive change in the world, my sense of meaning.” “It’s striking to me how much they seem to have in common—certainly, how common the themes are in what they want to do with their money. Despite cultural differences, despite political differences, there’s a very strong shared interest there—in environmental and sustainability issues, first and foremost, but also in a range of social issues, including poverty, public health, and gender inequality. Now of course, gender inequality is a high-level concern in, for example, the U.S., the U.K., and Europe, in a way it’s not in the U.A.E. or across the Middle East—where there are very different cultural mores and political power structures in place. But even within them, I’ve found a lot of interest in the idea of women’s education, of women’s empowerment, of investing more in women entrepreneurs—a sense that this was important for their society.” “You can see some aspects of this wealth transfer that are apt to be transformative, in one way or another, already happening: You can see the effects of the rising generations’ technological adaptations, for example, particularly in fintech, which allows them to check and make decisions on their assets all the time—and which, as it disrupts asset management as an industry, will distribute investment decisions in a whole new way. You can see their influence in innovations at the intersection of health and technology. You can see it at every touchpoint between their wealth and the world around it. More women are meanwhile coming into wealth, by inheriting it or as entrepreneurs, bringing different perspectives and priorities to what they invest in—even changing the language of finance, which has traditionally been run through with a kind of hierarchical, aggressive masculinity, whether it’s asset stripping or bull markets, or what have you. More investors are coming from traditionally marginalized communities. More are coming from Africa, from Asia, from around the developing world. And they’re all bringing different perspectives and priorities too.” [Members can read the full interview here]( Enjoy The Signal? Send this newsletter along to a friend who’s as curious about the world as you are. Someone send it to you? Sign up [here](. FROM THE FILES Albert Stoynov ‘A Whole New Era’ After a video was posted in early April of female students in Iran dancing and riding a motorcycle to celebrate their college graduation, their university has said it would pursue legal action against the women. Iranian human-rights lawyers have defended the graduates’ celebration as completely legal, while the university’s threats have prompted new calls within Iran to support women and students facing repression by the Islamic Republic. The public behavior of young women in Iran has been a matter of unrelenting national controversy since the 22-year-old Mahsa Amini died in police custody in September 2022, after being arrested and beaten for not wearing her hijab in accordance with the country’s laws. Her death triggered weeks of demonstrations throughout Iran, along with effusive global condemnation. In the month following Amini’s death, in October 2022, Vali Nasr [examined the threat the uprising posed to the regime](. The scale of the protests, Nasr says, revealed the breadth of popular discontent with the country’s leaders—and with some of the cultural foundations of the Islamic Republic itself. To access our full articles, full archive, and to support The Signal as we build a new approach to current affairs, become a member. [Join The Signal]( Coming soon: Sergey Radchenko on how relations between China and Russia have developed during the war in Ukraine … This email address is unmonitored; please send questions or comments [here](mailto:mail@thesgnl.com). To advertise with The Signal: advertise@thesgnl.com. Add us to your [address book](mailto:newsletter@thesgnl.com). Unsubscribe [here](. © 2023 The Signal [unsubscribe](