The United States saw an increase in its millionaire population in 2024 but is the wealth management industry ready for the needs of often-younger high-net-worth individuals?
The newly released World Wealth Report 2025 from Capgemini Research Institute reveals that the US added 562,000 new millionaires, a 7.6% increase, while the overall cohort’s wealth grew by 9.1%. North America overall saw an 8.9% increase in wealth and a 7.3% rise in population, compared to 7.2% and 7.1% increases respectively in 2023.
Globally, macroeconomic issues weighed on many regions with Europe, Latin America and the Middle East showing declines in their HNWI populations, and while Asia-Pacific’s HNWI population increased 2.7% there were variations across the region with India and Japan both gaining 5.6% while China lost 1%.
The report highlights some challenges for wealth management firms, especially regarding the transfer of around US$84 trillion in wealth that is creating next-gen HNWIs. Almost nine in ten of respondents from this cohort said they are likely to transfer away from their parents’ wealth management firms within 1-2 years of inheritance.
Almost three quarters of American HNWIs say they expect to receive an inheritance within the next 10 years but 25% of wealth management executives who took part in the study say their firms struggle to navigate the wealth transfer because they don’t understand beneficiaries’ needs.
The report shows the different investment behaviours of next-gen HNWIs compared to their parents with digital tools, alternative assets, and niche product offerings all deemed important. For example, 64% of this cohort prefer private equity to diversify their investment portfolios.
With advisors perhaps feeling that their firms are not geared up for the large and wealthy young generations, almost half indicate plans to likely switch and join a competitor firm in the next 12 months.
Kartik Ramakrishnan, CEO of Capgemini’s Financial Services Strategic Business Unit and Group Executive Board Member said that the next-generation of high-net-worth individuals arrive with vastly different expectations to their parents.
“This necessitates an urgent shift away from traditional strategies to effectively cater to their evolving needs on this wealth journey,” he said. “Firms must also prepare to equip advisors with the digital capabilities, potentially augmented with agentic or generative AI, to mitigate the risk of losing both clients and key employees.”
Capgemini’s report suggests several things that wealth management firms should do to engage with next-gen HNWIs:
Currently one-in-three advisors express dissatisfaction with their firms’ lack of digital capabilities, negatively impacting their productivity, and creating a technological divide and with 62% of next-gen HNWIs saying they would follow their advisor if they moved to a different firm, this directly impacts retention, as advisors struggle to engage these digital-native clients.
A $141M judgment and a federal asset freeze collide over one shrinking pool
The firm's CFO and EVP of Wealth Management Solutions are the latest executives to exit the broker-dealer.
Clients are saying they would consider switching advisors if another professional offered estate planning services, according to a new Trust & Will survey.
CEO Laurel Taylor says the fintech's composable AI stack helps workers optimize dollars across Trump Accounts, 529s, 401(k)s, and other employee benefits.
The bank has swiped three private banking veterans from BNY as the city climbs the ranks of America's fastest-growing wealth hubs.
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.
