An estimated $3.5 trillion will be transferred from older to younger generations in the next decade, the largest intergenerational wealth transfer in Australia’s history.
NAB Head of Private Wealth, Michael Saadie, said Australia’s private wealth segment is the fastest growing sector of the economy.
“The private wealth segment has been growing steadily for years, but since the pandemic has been expanding rapidly, outpacing the rest of the economy,” Mr Saadie said.
“The annual value of wealth transfers has more than doubled since 2002. We anticipate an estimated $5.4 trillion will transfer to the younger generation in the next 20 years.”
Key investment trends occurring include:
- Responsible investing: The Australian Responsible Investing market was worth $1.3 trillion in 2022, representing approx. 36% of the ‘total’ investable market.
- As we see change on the global political stage, investors are looking to diversify across asset classes and exploring Fixed Income as an alternative asset class.
- For nabtrade investors, materials and energy remain two strong areas of interest for investors
ETFs continue to rise consistently
Research conducted by JBWere in partnership with CoreLogic on the growth of women and wealth states this will also see the growth of women’s financial position.
The critical drivers of this change are greater female workforce participation, including well-paid positions in traditionally male-dominated industries, surging female entrepreneurship and intergenerational wealth transfer.
Not only will Baby Boomer families pass on money, but it is projected that for at least two decades post inheritance women will be in charge of the family finances as they outlive their partners. In the 70-plus age group, there are 16% more females than males and this widens to 33% for those aged over 80.
Read the full report ‘The growth of Women and Wealth’.
To learn more about the growth of NAB’s leading Business & Private Bank read NAB’s 2024 Annual Report.
