How millennials and Gen Z differ from older clients

Bank of America Private Bank projects a $124 trillion transfer of wealth by 2048, with millennials expected to receive about $48 trillion and Gen Z about $39 trillion. Surveys from Bank of America Private Bank and Parnassus Investments identify how younger heirs plan to invest and communicate compared with older generations.

Respondents aged 21 to 43 show less reliance on traditional stocks and bonds. More than 70% of that group told Bank of America they do not believe higher returns can be achieved by investing only in stocks and bonds, compared with 28% of investors aged 44 and older. Younger investors currently allocate about 47% of their portfolios to stocks and bonds, versus 74% for older investors. Ninety-three percent of the younger cohort said they intend to increase exposure to alternative investments in the coming years, and cryptocurrency ranked among the top perceived growth opportunities.

Younger investors also place greater weight on environmental, social and governance factors. Bank of America found 82% of investors aged 21 to 43 consider a company’s ESG record when making investment decisions, compared with 35% of investors 44 and older. More than one in five in the younger cohort reported investing in companies focused on positive social or environmental impact. A Parnassus Investments survey found 84% of millennials consider it important that their investments align with their values, while 53% said aligning investments with values is difficult.

Parnassus data show gaps in some traditional wealth-building behaviors and mixed risk tolerance. Half of millennials listed saving for retirement and building emergency savings among their financial goals, and nearly 80% said they hope to retire early. At the same time, 80% of millennials reported discomfort with a 10% swing in portfolio value. Joe Sinha, chief marketing officer at Parnassus Investments, observed a mismatch between interest in crypto and stocks and low tolerance for volatility and recommended that financial professionals emphasize spending below income, clarify risk tolerance and consider actively managed funds where appropriate.

Digital habits and communication preferences differ by generation. As the first fully digital generation, younger investors prefer short-form video and more frequent updates. Only 6.5% of millennials wanted quarterly updates, while 39% wanted weekly contact, according to the Parnassus survey. Sinha advised advisors to increase digital engagement without necessarily conducting full portfolio reviews each week.

Additional survey findings show nearly half of younger investors focused on digital investments have not considered hard assets such as real estate. Advisors working with multiple generations may include adult children in client relationships and provide education that connects enthusiasm for new asset classes with traditional wealth-building strategies.

The projected figures reflect demographic change and estate movement over coming decades. Financial professionals that adjust service models, investment offerings and communication styles will encounter an incoming group of wealth holders who favor alternative assets, ESG considerations and more frequent digital interaction.