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Australia’s baby boomer wealth is on the move and directors need to know how this capital shift will occur and where it’s headed.
Australia is entering one of the largest shifts in capital allocation in modern history. Over the next two decades, $3.5 trillion in baby boomer wealth will flow to younger generations — a shift demographer Bernard Salt calls: “a changing of generations unlike any other before”.
This is more than a story about inheritances. It is a structural transformation of how Australians invest, enter the property market and allocate capital. Fund managers are rethinking product design, advisers are recalibrating client strategies and boards face new imperatives around governance, risk and investor stewardship.
For directors, understanding this transfer is crucial. It will shape liquidity, portfolio risk and investment horizons for the next 20 years — and offer lessons on attracting, retaining and safeguarding clients.
The demographic engine behind the shift
Baby boomers — five million Australians born between 1946 and 1965 — are entering their 80s. During a recent episode of the Speaking of Wealth with Commonwealth Private podcast, Salt noted that “during the 2030s, the baby boomers… will start to exit this world”, triggering the transfer of an estimated $175b a year from boomers to their children and grandchildren over the next two decades.
Several factors make this wealth handover unlike any before. Families are smaller, creating fewer heirs; and boomers are living longer, placing pressure on Gen Xers balancing care for ageing parents while raising children. Property dominates boomer wealth and the riches are flowing earlier than in past generations, often to help millennials secure housing. Salt observed that homes purchased for “something like $50,000” in the 1980s are now selling for “$2m in Sydney and Melbourne”.
“I don’t think baby boomers will wait until they die to pass on their wealth,” said Salt. “It makes sense this wealth transfer will not be a single hit — it will be dribs and drabs.”
Where the wealth is moving next:
- Baby boomers will shift $3.5 trillion to younger generations over the next 20 years
- $175 billion Per year over coming two decades transferred from boomers to their childen/grandchildren
- 146,000 High-net-worth individuals already investing in venture capital, private equity or private credit
A structurally different investor
As millions of dollars flow into younger hands, these new investors are charting a markedly different path. While the full impact on portfolios will unfold over the next decade, according to VanEck Australia CEO Arian Neiron, “We have already observed some differences in generational investing preferences that could indicate the future direction.”
VanEck’s most recent retail investor research showed younger generations are more likely to use ETFs (exchange-traded funds). “Usage among 31 to 39-year-olds was close to universal at 98.82 per cent, and for two in three 18 to 30-year-olds, ETFs represented more than half their portfolio.”
They also tend to avoid traditional vehicles, holding “fewer individual shares and… lower allocations to unlisted funds, term deposits and bonds”, says Neiron. Instead, their preferences centre on “Australian equities, healthcare, technology, clean energy, ESG and the major banks”.
Marc Jocum, senior product and investment strategist at Global X ETF, sees a similar trend among his clients, noting demand for thematic ETFs tied to structural megatrends like AI, renewable energy, cybersecurity and robotics. He says younger investors inheriting wealth will still rely on timeless principles of diversification, risk management and disciplined rebalancing, but will seek to pair these foundations with options that genuinely interest them.
“We see thematic ETFs as a way to inject energy and relevance into portfolios, even if the boring, plain-vanilla core does most of the heavy lifting in the background.”
Both Jocum and Neiron recognise that interest in private markets is also rising. A recent Praemium/Investment Trends report shows 146,000 high-net-worth (HNW) Australians are already investing in private equity, venture capital or private credit, with another 32,000 planning to enter the space within the next year.
“This trend reflects a desire for diversification and higher returns, particularly among ultra-HNW individuals,” the report notes. With trillions set to transfer to the next generation, younger investors are also likely to explore private markets. But while the opportunities are clear, understanding this complex segment can be challenging.
Neiron notes investors require sophistication to navigate this space, pointing to ASIC’s recent review of private credit, which found that concerns around valuation practices, governance and fees remain widespread. “Our own research found many advisers limit private market allocations to below 10 per cent because the risks are not always matched by reasonable compensation.”
Adds Jocum: We believe private credit can play an important role in portfolios, but due diligence is essential and pairing it with high-quality liquid fixed income remains a prudent approach.”
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Building capability
The transfer of wealth is not purely financial, it’s also about making sure the next generation can use it wisely. Susie Grehl, CommBank’s Executive General Manager Wealth & Private, recently warned that the greatest destroyer of wealth isn’t tax or markets, but capability asymmetry, when assets are passed on before financial understanding or responsibility. “My number-one recommendation to families navigating this wealth transfer is to start the conversation early,” she said.
Matt Walsh, Head of Private Wealth Relationships at Praemium, similarly stressed in a recent blog post that next-generation engagement is critical. Advisers, he wrote, must tailor communication to digital-native millennials and Gen Z, provide education and experience in wealth management and expedite early exposure to financial responsibility.
“To help facilitate the transfer, retain assets and capture more of the immense opportunity, advisers need to remain relevant and effective, and have a clear strategy to deal with the wealth transfer,” he wrote. “Providing financial education to the next generation is essential to ensure heirs can responsibly manage and grow their inheritance.”
Lessons from the boomer wealth transfer
- Make governance proactive and transparent
Fund managers use ongoing monitoring and automation to quickly identify discrepancies between a fund’s objective and its actual behaviour. Boards can mirror this by implementing systems to flag issues early and ensure every product operates as intended.
- Raise issues early
Fund managers foster cultures where raising concerns is encouraged. For boards, this means creating safe channels for staff to surface risks and challenge assumptions.
“No question is considered too small or silly,” says Jocum.
- Compliance, not box ticking
Sound governance is not a compliance exercise for fund managers, rather it’s fundamental to maintaining trust and building a business that endures.
“Start with the customer in mind, then work backwards,” Neiron advises boards.
Fund manager innovation
As the investment landscape evolves and younger generations assert new priorities, fund managers are also adapting their products to meet these changing needs.
Global X is investing in research, analytics and AI to deliver “smarter, more thoughtfully designed products and a more engaging investment experience for Australian investors over the coming decade and beyond”.
“We’re investing heavily in our research capabilities...rather than taking a ‘spaghetti cannon’ approach to innovation,” says Jocum. “We’re also expanding our data analytics and AI capabilities… to streamline internal processes... and provide better analytics to our investors.”
As these capabilities get more central to decision-making, the challenge for directors is to ensure the right leadership, accountability and governance frameworks sit around them.
Regulatory pressures and governance
While fund managers work to elevate their portfolio solutions, regulatory expectations still rise. “We continue to strengthen our reporting and disclosure practices, and see it as critical to maintaining trust,” says Jocum. “On governance and risk, we’re enhancing our internal controls, monitoring frameworks and investing in technology to identify issues proactively and ensure every product operates exactly as intended.”
VanEck also embeds risk, compliance and product governance across all levels, ensuring these functions have a central seat at the table rather than being consulted after the fact. “Risk management is ingrained in our culture, it’s not a box-ticking exercise,” says Neiron. “We have an investor-first ethos. Our role as a fiduciary is the foundation for every decision, with the trust of our investors treated as the business’ core asset that requires vigilant protection.”
“Calculated yet conservative” is how Neiron regards the VanEck approach.
“For boards and executives, the key message is that sound governance is not a compliance exercise,” he says. “It is fundamental to maintaining trust and building a business that endures. Start with the customer in mind, then work backwards.”
Takeaway for directors
The intergenerational wealth transfer isn’t just about moving dollars from one generation to the next. It’s reshaping how Australians invest, how advisers engage clients and how boards think about governance, risk and long-term strategy.
For directors, the lesson is clear — embrace change, put stakeholders at the centre of decisions and make governance a tool for building trust and resilience, not simply a compliance exercise.
This article first appeared as 'Baby boomer wealth move' in the February/March 2026 Issue of Company Director Magazine.
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