We’ve been hearing about the biggest transfer of wealth taking place as the Baby Boom Generation hands off to its descendants but that is merely the lead. The broader story goes a bit deeper.
The international consulting firm EY has attempted to put both the size and scope of this migration of wealth into context.
First, they estimate between $2 and $3 trillion will pass to inheritors in 2024 alone in what they are calling the Great Inheritance. Now, that is a US number but you can generally divide by 10 to get a reasonable estimate of the Canadian story so put out piece of this at $200 to $300 billion. The firm says more billionaires were created through inheritance than entrepreneurship last year.
This will put a lot of pressure on financial advisors. For one thing, a big percentage of the recipient group will be women. Secondly, nearly half of the wealthy families affected by this don’t have a succession plan. That means inheritors have not been introduced to or do not have any type of relationship with money managers.
