What trends are driving the global high-net-worth and ultra-high-net-worth space?

As younger generations take the reins of wealth from the Silent Generation and baby boomers, a new report from Knight Frank sheds light on the evolving affluent landscape and implications for future investment strategies.

In the latest edition of its annual Wealth Report, the firm said two-thirds (65 percent) of all global high-net-worth investors expect their wealth to increase in 2024, led by three-quarters of survey respondents from Gen Z (75 percent) and seven-tenths of millennials (69 percent). In contrast, just 52 percent of HNW baby boomers anticipate growth in the near term.

“The difference in outlook between younger and older generations will result in a substantial reappraisal of marketing strategies for anyone wanting to sell products or services to this newly wealthy group,” Knight Frank said.

Generally, Knight Frank found male HNW investors were more confident that their wealth will grow over the next 12 months (68 per cent of male respondents versus 63 percent of females). But young women investors bucked the trend, with 81 percent of female Gen Z HNW investors expecting to see their wealth grow in 2024.

The ultra-rich were even more optimistic than HNW investors, with 71 percent of ultra-high-net-worth investors surveyed expecting their wealth to grow this year. Citing research from Altrata, Knight Frank also pointed to the rising profile of women, who represent around 11 percent of the planet’s UHNW population, compared to just eight percent less than a decade ago.

“Given the attitudes of female Gen Zers … this looks likely to remain the direction of travel,” the report said. “Businesses looking to attract wealthy investors will need to adapt their strategies to ensure they are relevant to this new, broader market."

Environmental concerns are becoming a critical decision-making factor for younger investors, the report found. Compared to eight-tenths of both male and female millennial UHNW investors reportedly trying to shrink their carbon footprints, it said just 59 percent and 67 percent of male and female boomers, respectively, are trying to take those steps.

Knight Frank also found a generation gap in sentiment around property investments.

Among the 19 percent of HNW investors considering a home purchase this year, it said less than a tenth of boomers are thinking about it, in contrast to 23 percent of female millennials and 21 percent of their male peers.

“When it comes to commercial property, 19% of UHNWIs are considering investing this year,” Knight Frank said. “A much smaller percentage of HNWIs are considering a similar move: only 7% overall, with male millennials the most committed (9%) and male boomers the least (3%).”