Ultra-Wealthy Will Transfer $27 Trillion by 2050

When it comes to managing their wealth, 19% of parents from the next-generation group and 18% from the older generation agree that wealth management should be left to the experts, while their children focus on their careers. Over half of the older-generation parents said their children should find a balance between managing wealth and focusing on their careers. None of the respondents said they wanted their children to focus solely on managing the family wealth.

Despite their high level of wealth, most respondents said they took an informal approach to educating their children about money, focusing on budgeting, asset allocation and getting to know advisors. Nearly half of the next generation look to advisors for education. The report noted wealthy families frequently use a primary advisor as a “quarterback” to execute plans and coordinate efforts between other advisors. Philanthropy is a popular way for families to teach their children about wealth. The report found 73% of next-generation parents and 56% of older-generation parents use philanthropy to teach about wealth.

“For ultra-affluent families, wealth transfer can be a complicated process, both emotionally and practically. A goal of the research is to provide unique insights into the needs and concerns of the next generation and those of their elders as they face the challenges of wealth transition,” Douglas Ketterer, head of Morgan Stanley Private Wealth Management in the United States, said in a statement. One implication of the findings for advisors, Ketterer said, is that “they need to think like family advisors in the fullest sense, attuned to the attitudes and psychological disconnects that may exist between generations.”

As usual, men and women showed dramatically different attitudes about wealth. Nearly 80% of next-generation women were concerned about how wealth would affect their relationships. Less than a quarter of men shared the same worry. Half of women were worried about being targeted by unscrupulous people, compared with just 28% of men. Mismanagement of wealth is another fear for women (43%), while just 22% of men shared that worry.