Key findings:
London – October 15, 2020 – While financial security is on the minds of people across the income spectrum, a new survey reveals wealthy individuals are not immune to financial concerns, although their challenges are unique to their demographic. By 2030, over US$15 trillion in global wealth will transition to a new generation, marking one of the largest wealth transfers in history and more than half (54%) of the next generation of UHNW inheritors surveyed admitted they are worried they will lose the wealth their family has created, while 44% are concerned their children will lose the wealth. These insights are from a new survey1 – The next generation of global enterprising families: shaping tomorrow, today – by Campden Wealth, commissioned by RBC Wealth Management. Over 100 next generation inheritors, with an average family fortune of close to US$1 billion, were surveyed across Canada (18%), the United States and the United Kingdom (17%).
“Ultra-high net worth inheritors are not immune to the changing global landscape and the issues associated with it,” said Ross Jennings, Head of Sales & Relationship Management with RBC Wealth Management. “The ongoing generational wealth transfer places an additional need to ensure they can protect and grow their wealth for future generations while focusing on their interest in driving social and environmental change.”
Among those surveyed, the average ages Next Gens hit key milestones in their lives are:
Forty-three per cent of Next Gens have already assumed control of the management of the family enterprise, while 26 per cent plan to do so within the next decade. At present, 24 per cent hold a CEO or managing director role in their family enterprise, while 22 per cent serve on the board.
“It is common for next generation wealth holders to fear losing the fortunes their families have amassed,” remarked Dr. Rebecca Gooch, Director of Research, Campden Wealth. “Great wealth is often created over generations and each generation does not want to be the one responsible for losing it. The emerging generation has a lot resting on their shoulders. With that said, there is no generation better prepared to tackle the challenges we as a society face, and this one is intent on making a positive social and environmental impact.”
The coming wealth transfer is unfolding against a backdrop of uncertain times marked by a global pandemic, geo-political challenges, an aging population, and a climate change crisis. As a result, 73 per cent of Next Gen UHNW inheritors believe that, given the problems faced by the word today, their own children will have a more difficult and challenging life than their own. More than half (56%) believe their children should learn about the importance of social and environmental responsibility at home and almost two thirds (62%) feel a responsibility to grow their family wealth.
When next generation wealth holders were asked to rank the aspects of their lives they find most challenging, health problems ranked a joint second, alongside family dynamics. This was only surpassed by communication breakdowns, which ranked first. In a similar vein, nearly half (49 per cent) of Next Gens reported to be worried about their health.
Notable proportions of Next Gens also expressed concerns with regard to caring for their aging parents. Thirty-nine per cent reported feeling concerned about having adequate time, while 17 per cent reported concerns about who would accept primary responsibility for their care, and 9 per cent expressed concerns regarding an awareness of the health care system.
While this statistical data was collected prior to the World Health Organization’s declaration of COVID-19 as a global pandemic, follow-up interviews were conducted after the initial announcement. In these interviews, Next Gens spoke about how their families have been dealing with the pandemic. While some families have been addressing the crisis head-on by working in hospitals, others have been focusing their philanthropic efforts to combat the disease, or re-evaluating their investment strategies given the financial turbulence caused by the crisis.
Succession planning remains a priority for UHNW families, with 67 per cent currently having a plan in place, while one third (33%) are either without plans or have Next Gens with no knowledge of existing plans. Just over one quarter (28%) of Next Gens believe their families are somewhat or very unprepared for succession.
1A total of 101 surveys with next generation wealth holders from the United States, Canada, and the United Kingdom were collected between October 2019 and early March 2020. In turn, the report’s statistical findings are relevant from the date of collection, which was prior to the World Health Organization declaring COVID-19 to be a pandemic. Twenty interviews were also conducted with Next Gens between October 2019 and April 2020 to provide deeper insight into the survey responses and to produce the case studies.
RBC Wealth Management: Ben Adams, RBC Wealth Management, +44 20 7653 4516
Campden Wealth: Dr. Rebecca Gooch, Director of Research, +44 (0) 20 3763 2806
RBC Wealth Management directly serves affluent, high net worth and ultra high net worth clients globally with a full suite of banking, investment, trust and other wealth management solutions, from our key operational hubs in Canada, the United States, the British Isles, and Asia. The business also provides asset management products and services directly and through RBC and third party distributors to institutional and individual clients, through its RBC Global Asset Management business (which includes BlueBay Asset Management). RBC Wealth Management has almost C$1.1 trillion of assets under administration, C$834 billion of assets under management and more than 4,800 financial consultants, advisors, private bankers, and trust officers. For more information, please visit www.rbcwealthmanagement.com.
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Campden Wealth is a family-owned, global membership organisation providing education, connectivity, research and networking opportunities to families of substantial wealth, supporting their critical decision-making, helping to achieve enduring success for their enterprises, family offices and safeguarding their family legacy. Campden Research supplies market insight on key sector issues for its client community and their advisers and suppliers. Through in-depth studies and comprehensive methodologies, Campden Research provides unique proprietary data and analysis based on primary sources. Campden Wealth owns the Institute for Private Investors (IPI), the pre-eminent membership network for private investors in the United States founded in 1991, and the Campden Club, a global membership network for families and family office executives. Campden further enhanced its international reach with the establishment of Campden Family Connect PVT. Ltd., a joint venture with the Patni family in Mumbai in 2015. For more information: http://www.campdenwealth.com/
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