Massive wealth transfer: 300 billion from Italy's Paperonians to their heirs
Study by the Private Banking Association: 300 billion will pass from one generation to the next in the next few years
by Morya Longo
3' min read
3' min read
We often talk about generational change in companies. But it is rarer to dwell on the great wealth transfer that is about to take place from the older generations to the younger ones: the Aipb (Italian Private Banking Association) estimates that in the next five years alone, 180 billion euro will pass from one generation to the next among wealthy families. And between now and 2033 this will rise to 300 billion. We are not talking about all Italian families, but only those who are private banking clients: that is, those with financial wealth in excess of EUR 500,000, who hold 32% of the total financial assets of Italian families. But the figure, albeit partial, gives us pause for thought: the great generational imbalance is beginning to redress itself little by little.
Of course, considering that the investible financial wealth of Italians (all) amounts to 3,490 billion (Source: Aipb and Prometeia), we are talking about figures that are not gigantic. But these are still significant numbers. Which pose some questions: how will the new generations manage this wealth that they will inherit? What will their priorities be? How should managers behave? "Private banking manages the assets of five generations of customers,' explains Andrea Ragaini, president of Aipb. 'Among these there are some elements in common: the figure of the dedicated banker, a customised offer and a wide range of investment products. Needs then differ on other issues'. Aipb, in its research, shows which ones.
Longer life
.The first theme that emerges is that the generation that will benefit from this legacy (we are not talking about the very young, but people aged 40 and over) has an increasingly long life expectancy. Their first goal is therefore to protect their standard of living in old age: they must therefore secure sufficient resources from the outset to cope with a quarter of a century (23 years on average) beyond retirement age. Consequently, the advisory service must take into account a longer time horizon and higher potential risk, in order to seek greater opportunities for returns. And research confirms this: 78% of private banking clients expect to be advised on long-term planning.
Environmental impact
.Another important topic is sustainability. "The data we have shows that the younger generations want more and more details and explanations about the environmental and social impact of their investments," Ragaini notes.
This, in short, is an increasingly strong need among the younger generations. And the world of private banking is adapting: Aipb's research shows that the weight of Esg investments in the private banking world stands at 33% of the total in 2023. But 96% of industry players think this share is set to grow further in the next 12 months. "The trend is growing strongly," Ragaini confirms.
