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As the demographics of inheritors and the next generation change, attitudes about wealth and how to manage it are beginning to shift.

In the UK, where one in five Baby Boomers are said to be millionaires, traditional views toward wealth are deeply rooted in history and social class. But a new survey conducted by The Economist Intelligence Unit (EIU), commissioned by RBC Wealth Management also hints at evolving attitudes.

According to the New wealth rising survey, 73 percent of high-net-worth individuals (HNWIs) in the UK believe there should be a better balance between encouraging personal wealth creation and ensuring equal opportunities to accumulate wealth across society.

New wealth rising, which targets HNWIs, adult children of HNWIs and high-earning professionals in the UK, U.S., Canada, China, Hong Kong, Singapore and Taiwan, looks at the shifting landscape of global wealth, where wealth will be and how it will be invested.

With the largest transfer of wealth in history underway, major attitudinal shifts are emerging. Interests are swinging from local to global, smart philanthropy is taking hold, and impact- and alternative investing are going mainstream. As wealth shifts—globally and from one generation to the next—the influence of affluence will change.

The survey also found 59 percent of HNWIs say their beliefs about wealth are very different from those of their parents. The younger the respondent, the stronger the view, with 71 percent of younger generations (those born after 1965) feeling this way and 46 percent of older generations (those born in 1964 or earlier) holding this view.

When asked what best defines wealth, older respondents listed ‘security’ followed by ‘quality of life’ and ‘freedom’ as their top three answers. While those were also among the top definitions for the younger generation, their answers were also distributed across a broader range of options. Happiness, for example, ranked almost as high as quality of life, freedom, and security for the younger generation. And about twice as many younger respondents as older listed 'health' as another definition of being 'wealthy'.

What are the drivers of change?

Combined with evolving demographics, some of the key drivers for the attitude shift include culture, education and technology, according to Amit Kotha, managing director, Enterprise Strategic Client Group at RBC in London, which works with some of the company’s most complex, ultra-high-net-worth (UHNW) clients.

“When you look at the UK ... the diaspora that is here, the Asian diaspora, the Middle Eastern diaspora - people from different religions and cultural backgrounds - they all have a different way of moving wealth to the next generation," says Kotha.

To that end, Kotha says financial institutions must recognise the important role culture plays when it comes to finding a team of wealth professionals who can comfortably navigate the cultural nuances and understand their clients' global needs.

When it comes to setting financial targets, 20 percent of younger HNWIs surveyed by the EIU say saving for their children's education is one of their most important goals, compared to six percent of older respondents. This could simply be a result of the different life-stages of the investors, but could also reflect the fact a greater number of students are pursuing postgraduate education.

Meanwhile, some children of HNW clients do not want to take over the family business, and instead, prefer to carve their own career path, Kotha says. They are doctors and lawyers, while others simply want to pursue their own entrepreneurial dreams.

This can conflict with clients who hoped to pass the family business on to the next generation, but instead must make alternative plans as they head into retirement. For some, the path may mean selling the business rather than passing it on.

Another important driver of change permeating every corner of modern life is technology. While the “human touch" remains essential for HNWIs, especially for clients of considerable wealth, an increasing number of younger, tech-savvy investors prefer a more technology driven experience.

They want everything quickly, says Kotha. Technology has made everything move in real time, with the younger generation expecting solutions more quickly, wanting everything available digitally, and the ability to make decisions on their devices.

“If I see a paradigm shift, it's basically because of the technology piece coming into play for the younger generation," says Kotha. “Technology has changed a lot, and for the good. It's just, how do we balance that for both the old and the new generation?"

Finding a balance across all generations

For wealth managers and HNW families looking at legacy and estate planning, bridging the generational divide on multiple fronts can be a tricky balancing act. Wealth professionals need to create an environment where both the principals and the next generation's views are respected, even as values and perspectives on money differ.

The Economist survey, for example, found older generations in the UK feel most strongly about protecting their wealth for their future well-being (58 percent), while only 22 percent of Generation X and younger feel the same. Amongst older investors, 50 percent say having enough to support their lifestyle was one of their top three financial goals. This compares to the 25 percent of younger HNWIs who believe the same.

The survey also shows 18 percent of younger respondents included impact or socially responsible investing as one of their top three investment preferences, compared with just seven percent of older investors.

When it comes to investing, the older generation might also rely on gut instinct, while their children may want a team of advisors and experts or arm themselves with facts and data to evaluate and discuss, before making a decision.

“You can never have a generalised approach to wealth management because people are different, we come from different cultures and backgrounds," Kotha says.

Ultimately, there is no one-size fits all solution for navigating generational differences. But a well-thought out wealth plan can help families clear a path to financial success.


*Younger generations are defined as Gen Z, Millennials or Gen X (18-54 years old). Older generations are defined as Baby Boomers and those in the Silent Generation.

This publication has been issued by Royal Bank of Canada on behalf of certain RBC ® companies that form part of the international network of RBC Wealth Management. You should carefully read any risk warnings or regulatory disclosures in this publication or in any other literature accompanying this publication or transmitted to you by Royal Bank of Canada, its affiliates or subsidiaries.

The information contained in this report has been compiled by Royal Bank of Canada and/or its affiliates from sources believed to be reliable, but no representation or warranty, express or implied is made to its accuracy, completeness or correctness. All opinions and estimates contained in this report are judgements as of the date of this report, are subject to change without notice and are provided in good faith but without legal responsibility. This report is not an offer to sell or a solicitation of an offer to buy any securities. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Every province in Canada, state in the U.S. and most countries throughout the world have their own laws regulating the types of securities and other investment products which may be offered to their residents, as well as the process for doing so. As a result, any securities discussed in this report may not be eligible for sale in some jurisdictions. This report is not, and under no circumstances should be construed as, a solicitation to act as a securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in that jurisdiction. Nothing in this report constitutes legal, accounting or tax advice or individually tailored investment advice.

This material is prepared for general circulation to clients, including clients who are affiliates of Royal Bank of Canada, and does not have regard to the particular circumstances or needs of any specific person who may read it. The investments or services contained in this report may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about the suitability of such investments or services. To the full extent permitted by law neither Royal Bank of Canada nor any of its affiliates, nor any other person, accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained herein. No matter contained in this document may be reproduced or copied by any means without the prior consent of Royal Bank of Canada.

Clients of United Kingdom companies may be entitled to compensation from the UK Financial Services Compensation Scheme if any of these entities cannot meet its obligations. This depends on the type of business and the circumstances of the claim. Most types of investment business are covered for up to a total of £50,000. The Channel Island subsidiaries are not covered by the UK Financial Services Compensation Scheme; the offices of Royal Bank of Canada (Channel Islands) Limited in Guernsey and Jersey are covered by the respective compensation schemes in these jurisdictions for deposit taking business only.

This publication has been issued by Royal Bank of Canada on behalf of certain RBC ® companies that form part of the international network of RBC Wealth Management. You should carefully read any risk warnings or regulatory disclosures in this publication or in any other literature accompanying this publication or transmitted to you by Royal Bank of Canada, its affiliates or subsidiaries.

The information contained in this report has been compiled by Royal Bank of Canada and/or its affiliates from sources believed to be reliable, but no representation or warranty, express or implied is made to its accuracy, completeness or correctness. All opinions and estimates contained in this report are judgments as of the date of this report, are subject to change without notice and are provided in good faith but without legal responsibility. This report is not an offer to sell or a solicitation of an offer to buy any securities. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Every province in Canada, state in the U.S. and most countries throughout the world have their own laws regulating the types of securities and other investment products which may be offered to their residents, as well as the process for doing so. As a result, any securities discussed in this report may not be eligible for sale in some jurisdictions. This report is not, and under no circumstances should be construed as, a solicitation to act as a securities broker or dealer in any jurisdiction by any person or company that is not legally permitted to carry on the business of a securities broker or dealer in that jurisdiction. Nothing in this report constitutes legal, accounting or tax advice or individually tailored investment advice.

This material is prepared for general circulation to clients, including clients who are affiliates of Royal Bank of Canada, and does not have regard to the particular circumstances or needs of any specific person who may read it. The investments or services contained in this report may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about the suitability of such investments or services. To the full extent permitted by law neither Royal Bank of Canada nor any of its affiliates, nor any other person, accepts any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained herein. No matter contained in this document may be reproduced or copied by any means without the prior consent of Royal Bank of Canada.

Clients of United Kingdom companies may be entitled to compensation from the UK Financial Services Compensation Scheme if any of these entities cannot meet its obligations. This depends on the type of business and the circumstances of the claim. Most types of investment business are covered for up to a total of £85,000. The Channel Island subsidiaries are not covered by the UK Financial Services Compensation Scheme; the offices of Royal Bank of Canada (Channel Islands) Limited in Guernsey and Jersey are covered by the respective compensation schemes in these jurisdictions for deposit taking business only.


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