Many people are experiencing a sudden influx of money, property or other assets. Where is this wealth coming from and what are its impacts? The Chartered Professional Accountants of Canada said in 2023 that $1 trillion of wealth was expected to move between Canadian baby boomers and their millennial and generation X children from 2023 to 2026.

Now what should be done with that wealth? How much will the government tax? What is the best way to invest it? We have the pleasure today of answering these and other questions about the Great Wealth Transfer.

This article is based on insights from experts Warwick Bloore, CFA, MA, senior specialist at Vanguard Europe, Kamran Khan, CFA, chief operating officer at Sartorial Wealth Inc, SmartAsset AMP and Shawnee Grain & Feed.

The Great Wealth Transfer

The Great Wealth Transfer refers to the unprecedented shift of wealth from older generations – primarily baby boomers – to younger generations, including generation X, millennials and generation Z. Relative to historical norms, older generations hold a disproportionately large share of total wealth, much of which is expected to be transferred over the coming decades.

Several factors have contributed to this dynamic. Long-term appreciation in asset values, particularly in real estate and financial markets, has materially increased household wealth. At the same time, rising life expectancy has delayed the timing of transfers while allowing assets to compound further. Importantly, this wealth is not limited to cash holdings; it spans real estate, public equities, commodities and alternative assets.

The significance of this transfer lies in its implications for future capital distribution and management. As wealth increasingly resides with younger generations, understanding their financial priorities, preferences and constraints becomes critical. For example, elevated housing prices have increased leverage for many younger households, making debt management and housing affordability more prominent objectives than in prior generations.

While generational trends exist, differences across individuals remain substantial, driven by variations in personal circumstances, financial goals and engagement with financial tools.

Implications for investment professionals and institutions

The Great Wealth Transfer presents both risks and opportunities for investment professionals. Advisors must adapt their service models to meet the evolving needs of younger investors while continuing to serve older clients effectively.

Wealth transfers do not necessarily result in a one-for-one continuation of existing portfolios. Assets received through inheritance are often reallocated – real estate may be sold or retained, and financial assets may be redirected toward housing needs, debt reduction or alternative investments. Consequently, intergenerational transfers can lead to meaningful shifts in asset allocation rather than a simple pass-through of market exposure.

This dynamic introduces retention risk for advisors. While relationships with older clients may be well established, transferring assets to heirs can result in attrition if those relationships have not been cultivated. Early engagement with the next generation can help mitigate this risk, allowing advisors to demonstrate value and adapt their offerings to evolving priorities. Younger investors may not initially require comprehensive financial planning. Many seek lower-cost, passive investment solutions or have objectives unrelated to portfolio growth in the early stages of wealth accumulation. Advisors can address this by offering tiered service models that maintain engagement while accommodating simpler needs.

Finally, advisors will also need to expand their offerings, as a large portion of younger people are not interested in traditional equity and fixed-income investments alone. There is a stronger pull toward private debt, private capital, alternative investments, commodities, digital assets and other such assets. Not to mention that many in the younger generations are more likely to trade on their own rather than stick to passive, publicmarket index funds. Additionally, younger generations are showing a bigger interest in sustainability and ESG practices, and not just performatively. Many in the younger generations are looking hard at how an asset contributes to sustainability and ESG practices.

Portfolio preferences have also evolved. Greater access to digital platforms and investment information has enabled younger investors to engage more directly with markets, often through self-directed accounts or low-cost, passive exchangetraded funds. At the same time, interest has grown in thematic approaches, including ESG-oriented strategies and emerging asset classes such as digital assets. While public equities and fixed income are likely to remain the core building blocks of most portfolios, advisors will need to broaden their expertise and articulate a clear value proposition in order to remain relevant as investor preferences continue to diversify.

Minimizing tax impact during wealth transfer

Effective tax management is a central consideration in wealth transfer planning. While strategies must be tailored to individual circumstances, several general principles apply. Importantly, estate planning should be undertaken with qualified professionals and revisited regularly.

It is important to note that none of the strategies should be used exclusively or tackled alone. Specialists can help effectively manage estates, no matter how small, and keep tax impacts to the lowest possible. However, it is important to engage with these professionals early and on an ongoing basis, and to find one with a good track record.

Below are a few examples of strategies for managing intergenerational wealth transfers.

Early preparation and gradual transition

Sudden inheritances can pose challenges for recipients who lack experience managing significant assets. Gradual involvement in financial decision-making, combined with ongoing education, can reduce the risk of poor decisions, fraud or mismanagement. Phased transfers may also mitigate behavioural and tax-related risks.

Regular review of estate plans

Outdated or incomplete estate plans can result in unnecessary taxation, probate delays and unintended outcomes. Periodic reviews, coordinated among legal, tax and wealth advisors, are essential to ensure that wills, trusts and beneficiary designations remain aligned with objectives.

Proactive communication

Clear communication among families and advisors can reduce tax inefficiencies and minimize the risk of disputes. Establishing expectations about beneficiary roles, governance structures and decision-making processes is particularly important in complex estates.

Use of trusts

Trust structures can offer tax deferral, asset protection and control. In certain cases, estate freezes may allow future appreciation to accrue to beneficiaries while limiting tax exposure for the original owner.

Other strategies

Where multiple properties exist, strategic designation of the principal residence exemption can materially reduce capital gains tax. A variety of life insurance and other insurance strategies can also be incorporated to reduce tax impact upon death.

Minimizing tax impact on an ongoing basis

Tax efficiency remains highly relevant even beyond the initial transfer of wealth.

Asset’s main return type

Different income types, interest, dividends and capital gains are taxed differently depending on the account structure. Optimizing asset location across registered and non-registered accounts can meaningfully improve after-tax outcomes.

Consider lifetime tax rates

Tax-deferred accounts such as RRSPs and RRIFs shift taxation into the future, making withdrawal timing critical. Coordinating withdrawals with lower-income years and using Tax-Free Savings Accounts strategically can help smooth lifetime tax rates.

Better coordination among accounts

Integrating investment income with employment income, pensions and government benefits is essential to minimize taxes and avoid benefit clawbacks, particularly for programs such as Old Age Security. Advance planning for withdrawals from Registered Retirement Income Funds and the use of pension income splitting can further enhance tax efficiency.

Conclusion

Preparation for the Great Wealth Transfer is relevant at every stage of life. Early planning, clear communication and coordinated professional advice can help preserve wealth, reduce tax leakage and ensure continuity across generations. For investment professionals, adapting service models and engaging younger clients proactively will be critical to sustaining long-term relationships and assets under management in an evolving wealth landscape.