The Great Wealth Transfer May Become the Great Alts Boom

The biggest wealth transfer in history may also become one of the biggest boons for alternative assets.

With roughly $124 trillion moving from older to younger generations over the next two decades, many wealthy heirs aren’t following their parents’ investing playbook. Instead, they plan to direct a significant portion of those assets into alternatives, including cryptocurrency, private equity, commodities and even collectibles. Some 88% of Gen Z and millennial investors expect to increase their allocations to alternatives in the coming years, with most believing traditional assets alone are unlikely to generate outsized returns, according to a Bank of America report. “Younger investors don’t just have different preferences,” said Mike Pelzar, head of investments at Bank of America Private Bank. “They have a fundamentally different portfolio philosophy.”

The shift is also elevating the role of advisors. A key concern for many wealthy clients is whether their children will be prepared to manage inherited assets responsibly and preserve family wealth. Only about one-third of ultra-high-net-worth clients said their children are very prepared to receive an inheritance, according to the report. Roughly 80% involve their wealth managers in estate-planning discussions with the next generation. “[It] creates a structured forum for these generational conversations to happen proactively rather than reactively,” Pelzar said.

A Little Variety

Younger investors already allocate about 15% of their portfolios to alternatives on average. While enthusiasm for the asset class has outpaced actual adoption so far, Pelzar expects that to change as more wealth changes hands. “As younger, alternatives-oriented investors assume control of more assets, it is reasonable to expect that alternatives will represent a meaningfully larger share of wealth portfolios over time,” he told Advisor Upside. Although barriers such as complexity and high investment minimums remain, Pelzar said they are becoming easier to overcome with the right education and advisory support.

The report also found:

• Cryptocurrency ranks as the top wealth-creation opportunity among Gen Z and millennial investors, with 58% already owning digital assets. Gen X, meanwhile, is the fastest-growing generation of crypto investors.
• Older investors tend to view alternatives primarily as diversification tools, while younger investors are often drawn to the asset class out of genuine interest and conviction.

“This distinction should shape how advisors frame these client conversations,” Pelzar said. “Advisors who engage on these topics proactively are more likely to help clients make informed, well-structured decisions.”