Virtually every segment of our economy has benefited from the factors above, giving the average investor a greater amount of disposable income. Stock market investing performed well overall for most of the past 50-60 years. Real estate investing has shown very positive returns, especially over the last 20 years due to:

• Relatively low interest rate
• The general public’s, and especially baby boomers’, willingness to take on real estate mortgages
• Real estate lending policies becoming more lenient due to increased competition
• More disposable income and IRA savings enable more people to buy bigger homes, multiple homes and homes overall

Where is the Wealth Today?

Looking at the factors that created the wealth, one would assume that the majority of it is held in the stock or real estate markets. This assumption overlooks at least two very important participants: the WW II generation and entrepreneurs.

Much of the WW II generation never participated in the stock market to a significant degree, or money that was previously in the stock market may have been moved to more liquid assets, such as in certificates of deposit or money market funds. Lack of interest in the stock market may be due to this generation’s living through the crash in 1929 or their lack of knowledge of trading. Even those who never invested in stocks may have accumulated wealth through regular savings investments by spending less than one earns or compound interest, which has been referred to as the “eighth wonder of the world”.

Entrepreneurs have invested much, if not all of their disposable investment dollars into their own organizations, from farming to retail services, manufacturing and technology to name a few. These businesses, like any other asset will be transferred in some manner at some point in time.

Looking Ahead, Who Will Hold the Future’s Wealth?

Before the banking industry decides what services will be in demand, they need to consider future clients, in addition to those that have the wealth today. Future clients are typically the beneficiaries of those that currently hold the wealth. Gene Maloney, senior vice president of Federated Investors, has described the future generation, in general, as: a consuming generation, a more dysfunctional generation and a litigious generation.

These characteristics will have a major impact on how bank directors and CEOs prepare their institutions with the appropriate policies and procedures for doing business with this emerging generation.

What Services Will Be in Demand?

Each segment within the current generation will have unique service requirements in addition to the general services demanded by all. Many unique services are obvious; others may require market research conducted personally or in focus groups. A more important question for banks to consider is, “Are we prepared for significant growth?”

Banks are in a prime position to gain control of a significant share of this upcoming “great wealth transfer.” To capitalize on it, executives must recognize the impact that it can have not only on the trust department and bank, but to the community. Many individuals with wealth desire to see some of their wealth invested for improving their church and its mission projects, their community or the community of their youth, as well as other programs. By managing the assets locally, bank executives are in a good position to have greater impact on local community programs. This also brings greater awareness to their institutions.

(Editor’s Note: Ray L. Unger is co-founder and president of the nation’s fastest growing trust and investment management solution provider, AccuTech Systems, and founder of AccuTech University, providing educational opportunities to the Trust Industry, online at www.trustasc.com.).