In 1957 British Prime Minister, Harold Macmillan, made an rousing speech declaring that "most of our people have never had it so good"1. The phrase went down in history and people born at the time – the Baby Boomer generation – went on to be far better off than their parents.

But the trend didn’t last. It’s not clear when or exactly why this happened but, as Deloitte’s Chief Economist, Ian Stewart, explains here, we do know that on average older people in Britain have done better than the young in terms of wealth, incomes and benefits in the last decade or so.

Fresh figures from Deloitte show how lumpy generational wealth is (see Figure 1).  Our analysis of consumer survey data shows that more than 60 per cent of the nation’s net financial wealth is held by people over the age of 55. Including property and pension assets, the skew would be greater.

Figure 1. Self-reported wealth (after debt, excluding pensions and property) by age, GB, £ billion

Self-reported wealth

Sample: 2,046 GB adults

This matters to the UK’s £825 billion private banking and wealth management industry because retaining assets as they pass from Baby Boomers to their children is tough2. A reasonable proxy is the US, where two-thirds of children switch from their parents' financial adviser after they inherit3. Why is this?

One of the main reasons is lack of contact. In many cases the children of wealthy parents need less help in managing their assets than their mothers and fathers. As a result, they interact infrequently with the family wealth manager or private bank and have little loyalty to it.

The risk of asset flight is increasing. This is because Generation Xers and Millennials tend to have radically different preferences to Baby Boomers. Willingness to use new technology is an obvious example. However, it can be tricky for incumbent private banks and wealth managers (PBWMs) to keep up with these shifts. Who will be the winners and losers of this dislocation?

That’s a moot point. What’s clear is that a number of adjacent sectors have reasons to be confident that they can prize away wealthy customers at the point of inheritance. Start-up wealth managers with deep expertise in digital technology can have innovative ideas and offerings. Select investment managers have popular direct-to-investor platforms. Life insurers have trusted mainstream brands and access to many customers via their pension platforms.

All of this means one thing: competiton for future PBWM customers is increasing and the stakes are high. How should PBWMs consider responding?

Start with the lack of contact with clients’ heirs. Our hypothesis is that they need help with a variety of financial decisions, and that they’d be willing to go online to research these decisions. PBWMs could consider developing websites and apps to help people in this potential customer segment make decisions and, in the process, build loyalty among them.

To test this hypothesis we analysed our survey. We asked consumers whether they would consult a website or app for help with a range of financial decisions. We then filtered the results to focus on the most relevant group of potential future clients: people aged 35-54 (i.e. Generation Xers who are closest to inheriting) with more than £50,000 in net financial wealth (see Figure 2). We assumed that higher wealth groups are the most likely to inherit large sums.

Figure 2. Top ten listed reasons for using free online personalised help

Personalised help

Samples: 119 (managing money and saving questions) GB adults aged 35-54 with more than £50,000 in net financial wealth and 113 (retirement saving and post-retirement funding questions) GB adults aged 35-54 who are not retired with more than £50,000 in net financial wealth. Note: respondents selected from a list of 28 reasons for why they would use online personalised help.

In our view the results point to two main conclusons. First, there is surprisingly high willingess to use a website or app to make financial decisions. More than a fifth of people in the sample would use free online research for each of the top ten reasons above. We view this figure as high because awareness of online advice is low and this set of consumers can afford face-to-face advice.

But we treat survey results with an element of caution. We suspect that more people say that they are willing to use such services than would do so in reality. For this reason, it’s worth looking at innovative markets such as China for clues as to how customer behaviour could change in the UK.

The standout case study in China is Ant Financial’s ‘leftover treasure’online fund. Launched in 2013, it was orignally intended to offer online shoppers interest on the cash in their e-commerce accounts with Alibaba. Over time it developed into an online money-market fund, giving savers interest rates three percentage points higher than those offered by banks4. The fund atracted 185 million customers and 600 billion yuan in assets within 18 months5. Due to its size, it can negotitage high rates with banks and pass them on to savers. However, its success is also down to a user interface that appeals to the young, highly paid first generation of white-collar workers. The app is easy to use. Savers logon via a single app that offers other popular functions such as shopping. It’s fun. For instance, savers can compare their interest with other local people.

Retirement is a key concern. Our second main finding is that retirement-related issues feature heavily in the reasons for which wealthy Gen Xers would conduct online research (seven out of the top ten). It is clearly a key concern for this demographic and one they need help with. Research from Aegon shows that engagement in retirement planning has risen since pension freedoms were introduced in April 20156. PBWMs are well placed to help future customers make retirement funding decisions, given their insights into their potential inheritance as well as their tax expertise.

Over the next thirty years Baby Boomers will pass down vast accumulatad wealth to their children. For PBWMs this trend will be tricky. Generation Xers and Millennials tend to have different preferences to their parents and this could lead many of them to change the family wealth manager when they inherit. One factor sticks out. Future high net worths are far more willing to try new technology to manage money than their parents. This is both a cause of the challenge for PBWMs and a route to a solution. In our view, successful PBWMs will be those who leverage their deep expertise in financial matters while embracing new digital channels to make contact with, and build loyalty among, future clients.

Total sample size was 2046 adults. Fieldwork was undertaken between 23rd - 24th January 2017. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).




Gavin Norwood

Gavin Norwood - Partner, Deloitte Digital

Gavin works with our key Insurance and Wealth clients to help them define and deliver their digital and broader customer engagement strategies. His expertise spans business and technology domains, with a specific focus on the evolution of Pensions and Wealth business models as they evolve through digitisation, the use of artificial intelligence and big data, and regulatory change.

Email | LinkedIn


Peter Evans - Head of Insurance Research, Deloitte

Through his research and insight, Peter helps Deloitte’s financial services clients develop and refine growth strategies. He specialises in digital technology, customer experience and the strategic implications of market-shaping trends within insurance and asset management.

Email | LinkedIn


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