The future wealth management landscape may well consist of the Millennials of today, but wealth managers have been urged not to prematurely shift their focus at the expense of Baby Boomer and Gen X clients.

Household assets in the US are projected to exceed $140 trillion by 2030, growing by 60 per cent over the next 15 years. As much as $240 billion in wealth management fees could well be up for grabs as a result of this rapid expansion, with four types of generational service offerings set to emerge as the cornerstones of the sector, according to the Deloitte Center for Financial Services.

“Wealth management in the US is a huge business today — and it is about to get even bigger,” said Gauthier Vincent, a principal at Deloitte Consulting and the leader of Deloitte’s wealth management practice. “But this market is likely to become increasingly segmented by unique generational needs.”

The report forecasts how generational wealth will evolve across four adult generations through 2030: the “silent” generation (whose youngest members are 70 years old), Baby Boomers, Generation X and Millennials. It provides strategic considerations for financial services firms as they think about adjusting their business models to reflect changing investor demographics.

Baby Boomers will continue to be the wealthiest generation in the US up until 2030, and remain the largest fee pool for firms, according to the report, entitled The Future of Wealth in the United States: Mapping Trends in Generational Wealth. Their share of net household wealth will peak at 50 per cent by 2020 and decline to less than 45 per cent by 2030, tapering off thereafter as mortality rates escalate, it said.

Generation X, meanwhile, will experience the highest rise in share of national wealth through the forecast period, growing from under 14 per cent of total net wealth in 2015 to nearly 31 per cent by 2030.

Although the report said Millennial wealth will grow at the fastest rate, this demographic will account for less than a fifth of national household wealth in 2030. Most Millennials are, therefore, unlikely to become consumers of top-tier wealth services anytime soon, according to Deloitte.

“All that said, I don’t recommend taking your eye off the ball on this new generation of investors, as Gen X and Millennials will make up half of wealth in 2030,” Vincent noted.

Now and in the future, traditional “cookie-cutter” strategies will generally be ineffective for meeting changing client needs; Deloitte believes diversity in wealth management offerings and business models will be “critical to success for industry players.”

Given these generational trends, the “cornerstones” of the US wealth management business within the next 15 years will be: consolidated services for affluent clients; stewardship offerings for clients with decreasing assets; “training wheels” for newcomers to wealth services; and debt management solutions for indebted households, it said.

"Our study has highlighted clear implications for financial services along generational lines," said Val Srinivas and Urval Goradia, authors of the report. "As Boomers gradually shift from gathering assets to spending them down, wealth management providers should alter product portfolios and pricing models accordingly.

"Effective execution will boil down to a few fundamentals. Firms will have to carefully choose the segments they want to focus on. Trying to be everything to everyone is unlikely to yield good results, especially as each wealth segment is likely to have meaningfully different financial needs and preferences for interacting with financial services firms. Our generational wealth forecasts show that the wealth landscape in the United States will be dramatically different in the next decade and half."