Older, wealthy family business owners are concerned about handing over control to the next generation, research into intergenerational wealth transfer shows.
Two thirds of older high-net-worth individuals (HNWIs) are concerned about the transition and 60% of those surveyed said they were seeking reassurance in the next generation’s ability to take over family businesses and the management of overall wealth.
Cultural influences, differing levels of education, and entrepreneurial mindsets were given as some of the factors.
A key concern among 35% of older family business owners is the next generation’s “tendency to take on greater risk”, the research from Barclays Private Bank shows.
The bank said that two in three originators (63%) think that the next generation are not as committed to managing the family business as them. Nearly 60% of families say different outlooks on life has created some friction in succession planning. And only 45% of millennials currently feel prepared to run the family business.
Barclays Private Bank’s Smarter Succession: The Challenges and Opportunities of Intergenerational Wealth Transfer is based upon a survey of over 400 global HNWIs with at least £5 million in assets each, in-depth interviews with 20 HNW families and their bankers and intermediaries, supported by independent behavioural analysis.
The younger generation is defined as 24 to 39-year-olds and nearly 70% of them did have a sense of duty to continue the family legacy.
Effie Datson, global head of family offices at Barclays Private Bank, said: “One way we see families successfully transition wealth between the generations is by establishing strong governance within their family office. By clarifying their values, their investment and management principles, and building a shared vision of the future, the family commits itself to an identity that is forward-looking and focused on building a better world for many generations to come.”
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