Starkly shifting attitudes amid a historic wealth transfer

What our 2022 Study of Wealthy Americans revealed about differences between generations

A photograph showing three people sitting on the dock putting their bare feet in a lake in the daytime. There is a middle-aged couple smiling at each other, and an older man, implied to be the smiling woman’s dad, looking with a smile toward his feet in the water. Behind them is an elegant home.

The next gen is expected to inherit $73 trillion in the coming years, and they could be poised to make very different decisions with their money than previous generations.

In our recent report on wealth, we found stark differences in the ways that older and younger generations look at some questions related to wealth – matters of philanthropy, of investment choices, of legacy and estate planning, and even art. In the context of the historic wealth transfer on the horizon, these differences suggest major shifts to come as younger generations take the reins on decision making for household wealth.

Viewpoints are not just shaped by age, however. We also found that in certain topic areas, attitudes are strongly affected by other markers – including gender, racial identity and wealth “journey,” which captures the distinct experiences of legacy wealth, self-made wealth and those in-between.

Key trends from the 2022 Study of Wealthy Americans

EACH OF THE FOLLOWING SECTIONS ARE EXPANDED/CONTRACTED AREAS (+/-):

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1. Skeptical of traditional investments, the next gen is drawn to alternatives.

73% of younger people believe that it is not possible to achieve above-average returns solely on traditional stocks and bonds, while only 32% of older people agree. The younger set allocates three times more to alternative investments and half as much to stocks.

A simple bubble graphic showing that younger wealthy people hold fewer stocks or stock funds compared to older people, and that younger wealthy people hold more alternative investments than older people. For wealthy people age 21 to 42, the average portfolio allocation to stocks or stock funds is 25% and the average allocation to alternative investments is 16%. For wealthy people aged 43 and older, the average portfolio allocation to stocks or stock funds is 55% and the average allocation to alternative investments is 5%.

2. Sustainable investing is the norm, for the younger cohort.

Ownership of sustainable investments (SI) has doubled since 2018 among all age groups – and for those aged 21 to 42, it’s now the norm. Younger people are also more likely to see impact and performance in SI investments. Among SI owners, three-quarters of the younger group see evidence of strong financial returns and evidence of positive impact, compared to about half of SI owners who are 43 or older.

A graphic showing two pie charts side by side, illustrating that ownership of sustainable investments doubled between 2018 and 2022 across both younger and older wealthy people. The first pie chart shows that in 2018, 37% of wealthy people aged 21 to 42 held sustainable investments, and 11% of people aged 43 and up held sustainable investments. The second pie chart shows that in 2022, 73% of younger wealthy people and 21% of older wealthy people held sustainable investments.

3. Most younger people want to establish their own philanthropic identity.

Half of philanthropic individuals support the same causes as their parents, but three-quarters say they prefer to establish their own philanthropic identity. There are also generational differences in giving methods. Younger people are two to three times more likely to give using structured vehicles, like donor-advised funds, charitable trusts and family foundations.

A graphic showing four bars in a chart, illustrating that more wealthy people say they prefer to establish their own philanthropic identity, differentiated from their family, while fewer wealthy people say they prefer to honor their family’s philanthropic legacy or tradition. The data is shown according to groups, where more women than men say they prefer to establish their own philanthropic identity, while more men than women prefer to honor their family’s philanthropic tradition. More white people than people of color choose to establish their own philanthropic identity, while more people of color than white people prefer to honor their family’s philanthropic tradition.

4. The youngest are especially active in art markets.

Younger people showed more interest than older people in tangible goods – including art. They collect it mainly for aesthetic value, rather than to generate investment gains. Older collectors may still hold the works of highest value, but younger collectors are more likely to be active in the art markets.

A simple graphic of triangles showing that younger art collectors are more active in the art markets than older art collectors, among wealthy people. The first two triangles show that 60% of all collectors have purchased a piece of art in the past 12 months, but 83% of younger collectors have done so.

The second set of triangles shows that 58% of all collectors plan to sell a piece of art in the next 12 months, but 76% of younger collectors plan to do so.

5. Estate-planning decisions present complexities for many families.

Only half of wealthy parents say their children are very prepared to inherit wealth. Most have spoken with children about family finances, reporting that children averaged 27 years old when they began the conversation. It is less common that wealthy people have spoken to parents about their estates.

A simple visual of speech bubble icon with large statistics inside, showing that 68% of wealthy people have spoken with children about family finances

A simple visual of speech bubble icon with large statistics inside showing 48% of wealthy people have spoken with parents about their estate.

6. Satisfaction with advisors is high, but there are conversation gaps to be addressed.

More than 90% of wealthy people have a human or robo advisor (or both), and 97% say they are very or somewhat satisfied with their advisor relationship. There are some areas that many would like to discuss more with advisors, including market and wealth planning issues.

A stacked bar chart graphic showing that there are gaps between how many people want to discuss specific tops with their financial advisors compared to how many people are currently discussing those topics with advisors. 58% are currently discussing tax planning, while an additional 30% would like to discuss tax planning. 50% are currently discussing best use of funds in a rising-interest rate environment, while an additional 30% would like to discuss it. 49% are currently discussing investing in an inflationary environment, while an additional 31% would like to discuss it. 45% are discussing trust options and implications, while an additional 31% would like to discuss it. 32% are discussing business succession planning, while an additional 31% would like to discuss it.

More change ahead

Though America becomes more diverse with every generation, that diversity has not fully reached the wealthy population included in this study, yet. Still, a very American form of diversity is well-represented among the older cohort – a share of the wealthy population that is fully or mostly self-made. Among baby boomers and the silent generation, there are as many self-made wealthy as there are legacy wealth, according to our analysis.

The younger respondents included in this study primarily represent legacy wealth, as the self-made among that cohort are early on the path toward building their wealth. As younger self-made people join the wealthy population, they are likely to bring even more diversity, both demographically and in terms of viewpoints. The shifting attitudes among the younger generation will impact the ways that families invest, give and pass on wealth in the decades to come.

To read the full 2022 Bank of America Private Bank Study of Wealthy Americans, download the report here.