Mobile millennial millionaires pose risk to wealth managers | USAEMALL.com

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Half of rich millennials moved their principal tax residence last year or intend to do so this year, adding to the challenge faced by wealth managers seeking to retain lucrative younger clients.

A quarter of millennials with more than $1mn in investable assets said they had moved in 2024 and a further quarter had plans to relocate in 2025, according to a survey of 3,400 people aged 28-43 in 2025 by consultancy Capgemini.

The heightened international mobility of wealthy younger people poses a challenge for wealth managers, who risk losing long-standing clients when they move.

Warren Thompson, managing director in the family office team at private bank Coutts, said that “the next generation . . . are more internationally mobile than they’ve ever been before”.

Gen Z is similarly mobile, with half of respondents aged 12-27 indicating that they had either moved last year or planned to do so this year, according to Capgemini’s survey of wealthy individuals.

Wealth managers often struggle to retain long-standing clients when assets are passed to the next generation, with many choosing to cut ties with their parents’ advisers even if they are not relocating.

The Capgemini survey showed that 81 per cent of those who were going to inherit wealth intended “to switch their parents’ wealth management firm within one to two years after inheritance”.

“Keeping money in the same place where it grew is no longer the case for the next generation,” said Elias Ghanem, global head of the Capgemini Research Institute for Financial Services, adding that many younger clients “won’t be doing what their parents have been doing” with their wealth.

In an attempt to win and hold on to business from younger generations, wealth managers and advisers are adopting new strategies.

These should include offering more access to crypto assets, create AI-enabled digital platforms and raise the quality of relationship managers, according to a report published by Capgemini this week.

Ghanem said there was “urgency” for wealth managers to modernise their business models rapidly to retain millennial clients.

James Morrell, deputy chief executive of Rothschild & Co’s UK wealth management business, said the bank deployed younger advisers in an effort to retain younger clients. “It’s very common for us to send multigenerational teams to face off against multigenerational clients,” he said.

Rothschild was “spending quite a lot of time and money trying to incorporate AI” into its work, he added.

Priyanka Hindocha, head of the UK family office division at wealth manager Stonehage Fleming, said her company holds a “next gen” programme where heirs come into the office to learn about finance and meet others in the same position.

Wealth managers cautioned that some people who move jurisdiction do not always take their assets with them. An executive at one of the UK’s biggest asset managers said many rich people leaving the UK because of changes to the country’s non-dom tax regime had left large amounts of assets with British managers.