High-net-worth individuals believe U.S. stocks offer the best opportunities for growing assets, but that conviction is less held by younger investors, finds the 2024 Bank of America Private Bank Study of Wealthy Americans. Millennials and Gen Z are increasingly looking beyond traditional stock and bond markets to build their wealth and are driving demand for investment real estate, private equity, digital assets, and gold.
“We’re living through a period of great social, economic and technological change alongside the greatest generational transfer of wealth in history,” said Katy Knox, president of Bank of America Private Bank. “Our study shows that wealthy Americans are focused on diversification, long-term goals and making a lasting impact with their wealth.”
Seventy-two percent of younger investors (ages 21-43) believe it is no longer possible to achieve above-average investment returns by investing solely in traditional stocks and bonds compared to only 28% of investors over the age of 44 who hold the same view.
The study found that among younger high-net-worth investors:
- 47% of their portfolios are in stocks and bonds, far lower than investors over the age of 44 (74%).
- 17% of their investment portfolios are allocated to alternatives compared to 5% allocated by older investors. Most (93%) plan to allocate more to alternatives in the next few years.
- Nearly half (49%) own cryptocurrencies, with another 38% interested in owning it. They rank cryptocurrency among the top opportunity areas for growth, second only to real estate investments.
- 45% own physical gold as an asset with another 45% interested in owning it. Overall, 41% of the wealthy either own (18%) or are interested in buying (23%) physical gold.
Despite placing importance on sharing and sustaining family money, gaps in planning could derail these well-intended goals:
- One in five respondents report experiencing strain over an inheritance, including 54% of younger respondents.
- Half (52%) do not have all three basic elements of an estate plan: a will, advanced healthcare directive, and durable power of attorney.
- Nearly half (48%) have not considered hard assets like real estate or art in their estate plans.
- While 56% have established a trust; only 27% understand trusts and their benefits very well.
- Sixty-nine percent have talked with their adult children about family wealth plans but start these conversations only after their children reach an average age of 31.
Giving back remains significant among the wealthy:
- Ninety-one percent support philanthropy inspired mostly by responsibility (52%) or desire for positive impact (40%). Younger donors are nearly twice as likely to support causes like homelessness (41%), social justice (33%), and environment/climate change (32%) compared to older donors.
- Forty percent either own or are interested in art collections; this includes 83% millennials/Gen Z.
- Sixty-five percent show interest in collectibles such as watches or rare cars; millennials/Gen Z lead this trend significantly.
The "Great Wealth Transfer" will also see women controlling more wealth than ever before. Over $30 trillion is expected to be transferred within a decade impacting financial decisions significantly according to Bank Of America Institute.
Escalent conducted this online survey on behalf of Bank Of America Private Bank involving high-net-worth respondents aged at least 21 years with at least $3 million investable assets excluding primary residence across U.S., maintaining ±3 margin error at confidence level ninety-five percentage representative sample US HNW population possibly non-clients BoA wealth/investment businesses
Bank Of America Institute established think tank leveraging data from clients globally aims insights economy sustainability global transformation offering thought leadership public consumption derived analysis trends health overall economy wide-reaching depth perspective proprietary datasets
For further information contact Julia Ehrenfeld via phone/email provided
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