Within the wealth management industry, there has been much discussion about “The Great Wealth Transfer (GWT).” The GWT generally refers to the expected and substantial shift in assets from the Baby Boomer generation to their heirs. According to the Cerulli Report-US High-Net-Worth and Ultra-High-Net-Worth Markets 2024 Report, this shift will result in approximately $100 trillion in assets being passed down to Gen X, Millennials and Gen Z by 2048.
While some believe the timeline and/or asset values of the GWT may be overblown, time will no doubt create opportunities for growth within the wealth management industry. As more firms enter or expand their wealth management presence, managers may need to adjust their offering to attract and retain clients going forward. The value proposition that worked for the Baby Boomer may not be sufficient for their heirs, and failing to adopt to this reality may encourage them to take their business elsewhere.
While asset growth is a universal goal amongst wealth clients, the means of achieving that goal may vary dramatically across generations. For example, Baby Boomers may place less emphasis on AI than subsequent generations raised on technology. Investment strategies, such as ESG and impact investing, are likely to gain greater traction with Gen X, Millennials and Gen Z than with Baby Boomers.
The “one-stop-shop” service model has also historically been less interesting to Baby Boomers than the generations that have followed. Some wealth managers seek to attract and retain clients by offering banking and lending services to their clients. Other managers offer trust, estate planning and other similar services.
Personal lines insurance for high-net-worth (HNW) individuals is another solution offered by some wealth managers as part of their enhanced value proposition. With the GWT, wealth managers are presented with new or expanded opportunities for growth. To enhance competitiveness, WTW can help round out wealth managers’ one-stop-shop value proposition via comprehensive portfolios of personal lines insurance for HNW individuals. Such portfolios can be tailored to HNW clients’ needs and may include:
Whether HNW clients have one or multiple, the home is a significant financial and emotional investment, and WTW will work to recommend the best risk and insurance protection for these properties.
In addition to being a potential physical loss, car accidents are a leading cause of catastrophic injuries, resulting in costly litigation. WTW can help HNW clients understand their automobile-related exposures and recommend appropriate risk options, including for classic cars and other high-end vehicles.
Protecting high-value items like art, jewelry and wine with insurance that safeguards those investments is of interest to many HNW individuals. WTW also provides expert risk management advice to help clients understand the threats to their collectibles and recommend strategies to mitigate them.
Whether a vintage wooden boat or a 200-foot yacht, WTW has extensive expertise in all aspects of watercraft insurance and will provide comprehensive coverage solutions to HNW clients.
Wealthier individuals need more than average insurance coverage if liability costs exceed basic coverage limits. WTW can work with HNW clients to protect their personal balance sheet and financial security.
Solutions are available for other unique situations (e.g., private aircraft, country estates and kidnap & ransom insurance) and can be arranged as needed.
The Asset Management practice within WTW monitors trends within the industry and identifies where our firm can bring value and solutions to our clients. The GWT presents an opportunity for wealth managers to enhance or expand their value proposition. WTW’s Personal Lines division regularly collaborates with wealth management firms to create tailored insurance offerings for HNW clients.
If your firm is seeking a one-stop-shop offering and does not already include insurance solutions for HNW clients, consideration should be given to doing so in the future. Adding these solutions to a firm’s value proposition may help retain existing clients, as well as attract the heirs expected to inherit their assets as a result of the GWT.
We welcome the opportunity to discuss WTW’s personal lines offering and outline how we may support your firm’s goal of growing its presence within the wealth management market.
WTW hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
The personal lines insurance market faces rising rates due to claims, property values and disasters. Selective underwriting and advice are key to managing risks and evolving consumer needs.
