Global Entrepreneurial Wealth Report<\/a> surveyed nearly 1,000 high-net-worth entrepreneurs to assess their plans for wealth transfer to their families.<\/p>\nMore than a third of entrepreneurs said they were planning to exit their company in the next five years. More than half of them would prefer to keep the business in the family, which is an even more popular option for people with more than $10 million in assets.<\/p>\n
However, as is usually the case, succession is a challenge.<\/p>\n
Entrepreneurs have serious concerns that their kids might not be up to the task of taking on their business or responsibly managing their wealth.<\/p>\n
A third of those surveyed highlighted their offspring\u2019s work ethic. Close behind were fears over a lack of interest in the family business, a lack of knowledge, and a lack of skills to run it effectively.\u00a0<\/p>\n
There is also a sizable share that think their kids might want to go and forge their own path in the business world, away from the perceived ties of a family unit.<\/p>\n
\u201cWe see families more interested in those modern businesses and modern economy, rather than some of the more traditional stuff. And I know that\u2019s a worry,\u201d Russell Prior, head of family governance, family office advisory, and philanthropy for HSBC Global Private Banking, told Fortune.<\/p>\n
Seven out of 10 entrepreneurs say next-generation readiness is a crucial factor in deciding when to step away from their company.<\/p>\n
Underlying these concerns, though, Prior says, is a fear of letting go.<\/p>\n
Just over a fifth of people with investible assets above $10 million haven\u2019t made any plans to transfer their wealth. \u00a0\u00a0<\/p>\n
The quirks depend on the level of family wealth, Prior says, as well as the age of those holding the assets.\u00a0<\/p>\n
The latter might have something to do with the habits of one cohort in particular: the Silent Generation.<\/p>\n
\u201cA big, big part of the Silent Generation was they don\u2019t talk about stuff. And I think there\u2019s still a large cohort of people who don\u2019t talk about it.\u201d<\/p>\n
Family day out<\/p>\n
To help that preparation, HSBC Private Banking runs bespoke events for its wealthy clients in a seemingly extravagant version of light family therapy.<\/p>\n
Father-son and mother-daughter combos and everything in between (and even kids alone) go to special events curated by HSBC designed to prepare them for inheritance and succession plans. The majority are attended by next-generation heirs.<\/p>\n
\u201cI think the dynamics at play are really interesting,\u201d Prior said.<\/p>\n
\u201cIt\u2019s great to mix these events up to give that range of opportunity for conversations.\u201d\u00a0<\/p>\n
The gatherings offer families the opportunity to understand what their wealth transfers could look like, beginning conversations with their children about their expectations for inheritance and whether they are prepared to take over the family business.<\/p>\n
Children are also taught the technical aspects of wealth, receiving an introduction to the world of investing and getting insight into entrepreneurial and philanthropic opportunities.<\/p>\n
\u201cSo you\u2019re in a sense giving a rounded exposure to all of the issues that are at play,\u201d Prior said.<\/p>\n
The conferences offer Gen Z heirs the chance to network with peers in a similar situation to their own, unsure of how to navigate the heady task of inheriting their parents\u2019 fortunes.<\/p>\n
It\u2019s unclear just how effective events like those offered by HSBC could be against obstacles like denial, next-generation work ethic, and uninterest.<\/p>\n
What is clear, though, is that the head-in-the-sand approach used by many current founders isn\u2019t a lasting solution.<\/p>\n
\u201cThe wealth transfer, it\u2019s inevitable, sadly, when people pass,\u201d Prior says. \u201cThe extent to which you get prepared for it isn\u2019t inevitable. It\u2019s a choice.\u201d<\/p>\n
Editor\u2019s note: A version of this article first appeared on Fortune.com on September 30, 2024.<\/p>\n","protected":false},"excerpt":{"rendered":"The $90 trillion Great Wealth Transfer is set to rebalance the generational income gap as the Silent Generation…\n","protected":false},"author":2,"featured_media":436924,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[5063,84,15236,5030,159222,4176,4998,10562,5632,4174,4175,56,54,55,5351,1630],"class_list":{"0":"post-436923","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-baby-boomers","9":"tag-business","10":"tag-editors-picks","11":"tag-entrepreneurs","12":"tag-europe-migrated","13":"tag-finance","14":"tag-gen-z","15":"tag-inheritance","16":"tag-millionaires","17":"tag-personal-finance","18":"tag-personalfinance","19":"tag-uk","20":"tag-united-kingdom","21":"tag-unitedkingdom","22":"tag-wealth","23":"tag-wealth-management"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/436923","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=436923"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/436923\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/436924"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=436923"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=436923"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=436923"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}