Much has been made of the $30 trillion wealth transfer from baby boomers to Gen Xers and millennials. Problem is, many rich families around the world don’t think the next generation is ready to inherit wealth and power, according to a new report.
Forty-seven percent of international families surveyed by Campden Wealth with UBS said their next generation was either somewhat or very unprepared for future succession. And 31% said their heirs were not qualified to manage the family wealth.
Family offices faced other hurdles around succession planning. Thirty-seven percent reported discomfort in discussing sensitive matters, and 33% said the patriarch or matriarch was unwilling to give up control.
At the same time, the study found that 54% of family offices had a succession plan in place, up from 43% a year ago.
However, one analyst interviewed for an article about the study on the Campden FB website questioned how robust succession planning in family offices really is, wondering whether families fully understand the concept.
The analyst noted that many families think they have a succession plan in place when one child joins the family office or when they decide that no family members will do so, but this is not a plan. In family businesses, the proportion of those with succession plans in place is usually less than 40%, according to the analyst.