When I first got into this business around 25 years ago, the typical millionaire was a white male in his 70s who had a high school education and owned a business. Despite increasing evidence that wealth is becoming more diverse and more accessible, there’s a widespread belief that the 1% is a homogenous group that gets richer and richer while the rest of the population struggles. And while older men still control a significant chunk of the world’s assets, new research points to evolving demographics that could stimulate profound and pervasive change:
• Women represent about one-third of all wealth-holders through a combination of enhanced earning power, marriage and inheritance. Traditional social and gender dynamics and longer life expectancies mean females also have a much greater chance of controlling wealth.
• Significant wealth is being created outside of urban areas and developed countries. Recently, Kazakhstan made its first appearance on the Forbes billionaires list, which also included a number of individuals from places such as Turkey, Peru and Chile that have not historically been considered super-rich strongholds.
• The average age of millionaires has dropped by about 20 years over the last quarter of a century, in large part because of estate planning transfers and the younger generation’s entrepreneurial endeavors, which show no signs of slowing and have helped to put wealth in the hands of a younger and younger cohort.
• There are more millionaires than ever before, and new ones are being minted every year, a trend that’s been aided considerably by technological advancements and the distribution power of the Internet.
As more age groups, genders, cultures and geographies are represented at the top of the socioeconomic scale, we will no doubt see changes in the ecosystems that surround and support wealth as they evolve to better reflect the people, passions and priorities at their center. There will likely also be a commensurate shift in how wealth is structured, stewarded and deployed. Each one of these trends has the potential to revolutionize wealth management, but collectively they can have a groundswell effect, bringing new opportunities to a bigger and more diverse group of professionals.
