The great generational wealth transfer is about far more than retaining assets. It will force private banks to rethink how they advise clients, provide access to investment opportunities, and define their role in an increasingly digitally driven and fragmented financial ecosystem, WealthSummit Chairman Claude Baumann argues.
Claude Baumann, Chairman, Wealth Summit (Image: FIN21)
Private banks frequently use «NextGen» as a convenient label for younger clients. In reality, the term describes a far more consequential economic group: the generation preparing to assume control of family fortunes, operating companies, and investment structures established by their parents and grandparents.
It includes heirs, future family business leaders, younger family office principals, and entrepreneurs who have already created substantial wealth of their own. Some are millennials or members of Generation Z (Gen Z). Others belong to Generation X (Gen X) but are only now becoming the principal decision-makers for multigenerational assets.
Private Banking’s Defining Challenge
The distinction matters because NextGen is not primarily an age category. It represents a fundamentally different relationship with wealth. More than $85 trillion is expected to pass between generations over the coming decades. Yet the private-banking industry’s defining challenge will not be the sheer size of that transfer.
It will be the fact that the recipients may feel little allegiance to the institutions, products, and advisory conventions chosen by the generation that created the wealth. Assets may be inherited. Client relationships are not.
Younger Clients Are Not Rejecting Advice
NextGen clients are often portrayed as digital natives who would prefer to replace their relationship manager with an app. That interpretation misses the point.
Research by CFA Institute found that more than 90 percent of wealthy Gen Z and millennial investors use some form of paid financial advice. Of those who work with an adviser, almost 70 percent interact with that person at least once a month. Younger clients are not abandoning advice. They are demanding advice that is faster, more transparent, more responsive, and technologically enabled.
They may use an AI app to summarize research, a digital broker to trade liquid securities, a specialist platform to access private markets, and a private bank for financing, structuring, and strategic advice. The bank will no longer control the entire relationship simply because it holds the custody account.
Trust Must Be Demonstrated
This changes the basis on which trust is earned. Traditional private banking has relied heavily on personal chemistry, institutional reputation, and discretion. These qualities remain important, but NextGen clients increasingly validate trust through observable performance: transparent pricing, consolidated reporting, robust digital security, clear portfolio attribution and the ability to explain precisely why a recommendation is appropriate.
They are also less tolerant of procedural friction. Waiting several days for a portfolio analysis, receiving reports that cover only assets booked with one institution, or repeatedly providing information that the bank already holds will look increasingly obsolete.
An excellent relationship manager will remain indispensable. But that adviser will be judged less by privileged access to information and more by the ability to interpret it, challenge the client’s assumptions and coordinate specialists across investments, financing, taxation, succession and family governance.
Traditional Reporting No Longer Suffices
NextGen wealth is also less likely to resemble a conventional portfolio of bonds, equities, and investment funds.
It may include an operating company, start-up equity, carried interest, intellectual property, private-market funds, real estate across several jurisdictions, digital assets, art, and philanthropic structures. The listed-securities portfolio held at one bank may represent only a small fraction of the client’s true economic exposure.
Traditional portfolio reporting is therefore no longer sufficient. NextGen clients will expect their bank to understand the entire balance sheet, including interaction between business, investment, liquidity, and financing risks.
A technology entrepreneur whose company represents most of their net worth does not primarily need another allocation to growth equities. More valuable advice may involve hedging, liquidity planning, diversification or financing solutions that avoid an immediate sale of company shares.
The bank must move from reporting assets to understanding wealth.
Emerging Investment Formats
The investment mix will evolve as well. Research in Asia suggests that younger wealthy investors remain committed to traditional assets while showing considerably greater interest in digital assets and emerging investment formats.
In UOB’s 2025 study of Asian high-net-worth individuals (HNWIs), 33 percent of respondents aged between 30 and 45 ranked digital assets among their three largest asset classes, compared with 17 percent of those aged over 60.
Private equity, venture capital, private credit, direct transactions, and co-investments are also likely to gain importance. Many younger wealth holders grew up in entrepreneurial families or created businesses themselves. They understand concentrated risk and often want greater involvement in individual investment decisions.
Access Will Not Be Enough
This creates a difficult combination. They want access to complex and illiquid opportunities, but they also demand greater transparency, more frequent information, and more control.
Banks that merely distribute another private-market fund will struggle to differentiate themselves. They will need to demonstrate genuine selection expertise, model liquidity across the complete portfolio, and explain fees, valuations and conflicts of interest with far greater clarity. Access is no longer enough. The value lies in judgment, due diligence, and portfolio integration.
Purpose Must Withstand Financial Scrutiny
NextGen clients are also more likely to ask what their wealth is intended to achieve. That may increase demand for sustainability, impact investing, philanthropy, and investments linked to long-term social or environmental themes. CFA Institute found that more than 90 percent of younger investors considered alignment with personal values important.
This does not mean they are willing to disregard risk, returns, or liquidity. On the contrary, financially sophisticated clients are likely to become increasingly sceptical of superficial sustainability claims. They will expect evidence that an investment produces measurable outcomes and that its fees, risks, and expected returns remain competitive. Purpose will matter, but it will still have to withstand investment scrutiny.
Redefining Legacy
Philanthropy may also become more closely integrated with portfolio construction. Rather than treating charitable giving as separate from wealth management, younger families may allocate capital across a spectrum that includes grants, mission-related investments, impact funds, and conventional commercial assets. This broadens the meaning of legacy.
The older generation may define success as preserving the family fortune. Its successors may want to modernise the family business, support entrepreneurs, finance innovation, or deploy part of the family capital to address a social problem. The bank’s role is not to choose between these objectives. It is to help families articulate them, reconcile competing priorities, and translate them into durable governance and investment structures.
AI Will Expose Mediocre Advice
Research summaries, portfolio comparisons, and basic scenario analyses can increasingly be produced within seconds. Against this background, AI will intensify the pressure on private banks.
Clients will arrive at meetings better informed and equipped with competing interpretations. They will ask why the bank’s proposal is superior to a lower-cost alternative, whether the recommended product genuinely adds value and how the adviser’s conclusions were reached. Routine information will become less valuable. Independent judgment will become more valuable.
Modelling Scenarios
Human advisers will still be essential when decisions involve an illiquid family company, competing family interests, cross-border legal structures, or the emotional consequences of inheritance.
AI can model scenarios. It cannot easily determine how control should be divided among siblings, whether a reluctant heir should lead the family business, or how a founder should relinquish authority without destabilising the family. Technology should therefore augment the adviser rather than merely reduce headcount.
The winning institutions will use AI to eliminate repetitive preparation, improve decision-making, and give relationship managers a comprehensive view of each client. The losing institutions will place a chatbot on top of fragmented legacy systems and call it transformation.
Personalisation Gap
The gap between promise and delivery remains considerable. Capgemini’s 2026 World Wealth Report found that only 17 percent of high-net-worth individuals considered their advisory experience seamless and personalised. At the same time, 97 percent of wealth-management firms continued to segment clients primarily by asset level.
That approach is becoming increasingly inadequate. Two clients with $30 million in investable assets may have almost nothing else in common. One may be preparing to sell a company. Another may be inheriting a complex family holding structure. A third may have created their wealth through digital assets. Asset size says little about the origin of the wealth, the risks surrounding it, or the advice the client actually requires.
Emerging Winners in NextGen Private Banking
The winners in NextGen private banking will not necessarily be the institutions with the youngest branding or the most sophisticated mobile application. They will be the banks that combine global investment access, modern technology, and institutional security with a deep understanding of entrepreneurship, family dynamics, and succession.
They must be prepared to advise on assets they do not manufacture, collaborate with external specialists, and provide a consolidated view of wealth held across several institutions. They will also need the confidence to recommend the best solution for the client, even when that solution sits outside the bank.
Loyalty Without Exclusivity
NextGen clients will probably use more financial-service providers than their parents did. Loyalty will therefore no longer mean exclusivity. It will mean trusting one institution to interpret, coordinate, and oversee an increasingly complex financial ecosystem.
Private banking will remain personal and advice-driven. But it will become less product-led, less hierarchical, and considerably less bank-centred. The central argument is now stated more directly: inheriting wealth does not imply inheriting the previous generation’s bank.
