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.
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