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BNY Mellon The Next Generation of Wealth Holders in United States 2022: 102 UHNW Families with Average of $752 Million Wealth & Expected Inheritance of $200 Million

30th December 2022 | Hong Kong

BNY Mellon Wealth Management & Campden Wealth has released a report on the next generation of UHNW families in United States, providing key insights into 102 UHNW families (Ultra high net worth) with average of $752 million in net worth and an average expected inheritance of $200 million, on family business, family office, family wealth, inheritance, succession planning, wealth management, philanthropic & sustainable investing activities, and digital assets investments.  The top 5 concerns for next generation are Family, COVID-19, Health, Succession, and Climate change.  51% to 55% are expected to take control of family business, family office or family wealth in the next 5 or 10 years.  61% with wealth of $250 million & more view that excessive wealth leads to family infighting and 42% with wealth below $250 million view that excessive wealth leads to family infighting (Average 46%).   95% agrees that the wealth provided them with opportunities and 64% agree that being born wealthy can cause family members to lose career motivation.  The top 5 challenges of succession planning are Family dynamics (51%), Breakdown in communication (35%), Discomfort in discussing this sensitive subject (33%), Patriarch/matriarch is unwilling to relinquish control (30%), and Lack of mentorship (27%).  The top 3 contacts for Wealth Management are Family office eg. accountant, attorney (26%), Parent (17%), Dedicated Relationship Manager (14%) and the top 5 areas where professional advisors are needed most – Trust & estate planning (99%), Tax planning & mitigation (97%), Succession planning/wealth transfer (63%), Complex investments (58%), and Asset allocation (45%).  The report is titled “The Next Generation of Wealth Holders in United States 2022.”  See below for key summary | View the full report here

“ 61% with $250 Million Above View Excessive Wealth Leads to Infighting, 51% Expect to Take Control of Family Business, Family Office or Family Wealth.”

 

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BNY Mellon The Next Generation of Wealth Holders in United States 2022

The Rich

BNY Mellon The Next Generation of Wealth Holders in United States 2022

102 UHNW families with average of $752 million wealth and expected inheritance of $200 million.

  • Average family net worth – $752 million
  • Total family net worth – $77 billion
  • Average expected inheritance – $200 million
  • Total expected inheritance – $19 billion
  • Total 102 UHNWI families  

Key Findings – Next Generation 

  • Top 5 Next Generation Concerns Family concerns, COVID-19, Health, Succession, Climate change
  • Average Age first learned about the extent of their family wealth – Age 25
  • Average Age expected to assume (or assumed) control of the family wealth – Age 48
  • Take control of family business within 5 or 10 years51%
  • Take control of family office within 5 or 10 years49%
  • Take control of family wealth within 5 or 10 years55%
  • Family member gender in charge of wealth – Male (69%), Female (19%), Other (8%)
  • Knowledge of inheritance – Existence of inheritance (90%), Amount of inheritance (72%), Timeframe of inheritance (69%)
  • Next Generation Top 3 Plans Upon Inheritance – Work for the family office (51%), Charity work / Philanthropy (40%), Work for the family business (33%)
  • Top 5 important lifestyle activities – Time with family & friends (81%), Career progression / entrepreneurial endeavours (63%) Health &  fitness (48%), Giving back to the world / helping others (43%), Travel and leisure (35%)

Key Findings – Succession Planning, Wealth Management – Family Wealth, Family Business, Family Office

  • Excessive wealth leads to family infighting46% Agree ($250 million below: 42% vs $250 million above: 61%)
  • Being born wealthy can cause family members to lose career motivation – 64% Agree
  • Being part of a successful family adds great pressure to live up to previous generations’ success  – 65% Agree
  • Whether family wealth has become a matter of dispute – 57% No vs 44% Yes
  • Views on wealth providing opportunities – 95% Agree
  • View on primary purpose of family office Preserve family wealth (32%), Increase family wealth (31%), Build/ preserve family legacy (18%)
  • Involvement in family business / family office – 86% in Family Office vs 55% in Family Business
  • Top 3 Preference to increase their role in the family business/family office  – Investment strategy/ management (42%), Financial planning (38%), Succession planning (38%)
  • Top 5 Challenges of Succession Planning – Family dynamics (51%), Breakdown in communication (35%), Discomfort in discussing this sensitive subject (33%), Patriarch/matriarch is unwilling to relinquish control (30%), Lack of mentorship (27%)
  • Top 3 type of Succession Plan in place  Formal written plan (33%), Succession plan in development (29%), Informally agreed, written plan (13%)
  • Who to Contact for Wealth Management – Family office eg. accountant, attorney (26%), Parent (17%), Dedicated Relationship Manager (14%)
  • Top 5 Areas where professional advisors are needed most Trust & estate planning (99%), Tax planning & mitigation (97%), Succession planning/wealth transfer (63%), Complex investments (58%), Asset allocation (45%)
  • Top 5 Financial institutions Next Generation have a relationship with – Private Bank (78%), Wealth Manager (71%), Commercial Bank (70%), Asset Manager  (55%), Online Brokerage (42%)
  • Top 5 Reasons to Change Wealth Manager – Change of relationship manager (49%), Displeased with services offered (46%), Next generation succession (42%), Sale of family business (28%), Desire to diversify investments/managers (24%)
  • Top 5 factors when selecting a wealth advisor – Trustworthy and responsive (86%), Competitive fees (58%), Access to alternative investments (53%), Tax planning and mitigation (51%), Fiduciary advice (51%)
  • Top 3 Philanthropy – Education, Youth/children, Community development
  • Top 3 Philanthropy Distribution Channels – Give directly to a cause, Give to charity, Family foundation
  • Top 3 Sustainable investing strategies – Thematic investing (e.g., clean energy, gender equality, healthcare, water, etc.), Impact investing, Positive / inclusionary investing in companies with good practices – 50%
  • Top 5 popular digital asset investing  – Fintech (86%), Biotech (77%), Healthcare tech (63%), Artificial intelligence (58%), Green tech (57%)
  • Top 5 motivation to invest in digital assets – Diversification from traditional investments (78%), Invest in an area before it becomes mainstream (70%), Potential returns more than offset the risk (44%), Inflation protection (30%), For fun (26%)

 

 

1) UHNW Families

Average Age of Next Generation on Family Wealth 

  • First learned about the extent of their family wealth – Age 25
  • Expect to assume (or assumed) control of the family wealth – Age 48

Most important lifestyle activities 

  1. Time with family and friends – 81%
  2. Career progression / entrepreneurial endeavours – 63%
  3. Health and fitness – 48%
  4. Giving back to the world / helping others – 43%
  5. Travel and leisure – 35%
  6. Gaining education – 28%
  7. Film, music, and the arts – 8%
  8. Sports – 6%
  9. Lifestyle/fashion – 3%
  10. Media/social media – 1%

Agreeing/sharing beliefs with parents on the following topics 

  1. Gender roles – 55%
  2. How to run the family office – 53%
  3. Family business succession planning – 52%
  4. How to manage the family’s wealth – 50%
  5. Religion – 49%
  6. How to run the family business – 48%
  7. Climate change/ environmental conservation – 48%
  8. Diversity and inclusion (e.g., LGBTQ+ rights, racial equality) – 44%
  9. Family governance – 42%
  10. Politics – 42%
  11. What philanthropic causes to support – 40%
  12. What to invest in – 38%
  13. Cryptocurrency – 34%

Topics discussed with family vs friends 

  1. Current events (e.g., war in Ukraine) – 91% vs 91%
  2. Family office / family wealth – 88% vs 22%
  3. Philanthropy/ charitable giving – 86% vs 80%
  4. Health – 86% vs 80%
  5. COVID-19 – 82% vs 84%
  6. Family business – 80% vs 34%
  7. Climate change – 75% vs 80%
  8. Arts / music – 72% vs 80%
  9. Politics – 70% vs 72%
  10. Social movements (e.g., diversity and equal opportunity) – 68% vs 77%
  11. Sports – 61% vs 73%
  12. Religion – 61% vs 67%

What keeps Next Generations awake at night

  1. Family concerns 
  2. COVID-19
  3. Health 
  4. Succession 
  5. Climate change
  6. United States democracy
  7. War in Ukraine 
  8. Aging parents
  9. Inflation
  10. Global Politics
  11. Work-related stress
  12. Career progression
  13. Pending Recession
  14. global politics 
  15. my children’s future 
  16. social division 
  17. cross-generational differences 
  18. Securing my financial well-being

 

2) Wealth, Inheritance & Succession

Whether the next generation has already assumed control 

Family Business

  • No, but likely within the next 10 years – 35%
  • No, but likely within the next 5 years – 16%
  • Yes, more than 10 years ago – 14%
  • Yes, within the last 10 years – 14%
  • No, and unlikely to happen within the next 10 years – 12%
  • Yes, within the last five years – 8%

Family Office 

  • No, but likely within the next 10 years – 24%
  • No, but likely within the next 5 years – 25%
  • Yes, more than 10 years ago – 13%
  • Yes, within the last 10 years – 11%
  • No, and unlikely to happen within the next 10 years – 10%
  • Yes, within the last five years – 17%

Family Wealth

  • No, but likely within the next 10 years – 36%
  • No, but likely within the next 5 years – 19%
  • Yes, more than 10 years ago – 10%
  • Yes, within the last 10 years – 11%
  • No, and unlikely to happen within the next 10 years – 16%
  • Yes, within the last five years – 8%

Family member currently in charge of the wealth 

  • Male – 69%
  • Female – 19%
  • Other – 8%
  • Prefer not to say – 4%

Next Generation who will be in charge of the wealth 

  • Male – 51%
  • Female – 30%
  • Other – 9%
  • Prefer not to say – 10%

I feel responsible for preserving the family wealth 

  • Agree – 91%
  • Neutral – 5%
  • Disagree – 3%

I’m totally at ease inheriting wealth

  • Agree – 66%
  • Neutral – 24%
  • Disagree – 11%

I fear I could lose the family wealth

  • Agree – 33%
  • Neutral – 31%
  • Disagree – 35%

Whether Next Generation feel comfortable with what they know about their inheritance 

  • Yes I know everything I need to – 57%
  • Somewhat, I know some but would like to know more – 35%
  • No, I don’t know enough – 7%

Next Generation knowledge about their inheritance 

  • Existence of inheritance – 90%
  • Amount of inheritance – 72%
  • Timeframe of inheritance (e.g., trust fund, outright bequest) – 69%
  • Wealth management transition plan – 59%
  • All wealth is going to charity – 14%
  • Little to no information shared – 14%

Plans for when Next Generation are inheriting the wealth by level of family wealth 

  1. Work for the family office – 51%
  2. Charity work/ philanthropy – 40%
  3. Work for the family business – 33%
  4. Travel – 31%
  5. Continue working in current employment, outside the family enterprise – 28%
  6. Focus full-time on myself/my family – 25%
  7. Start a new business – 14%
  8. Education – 9%
  9. Switch to preferred employment, outside the family enterprise – 7%
  10. Close family business – 2%
  11. Close family office – 0%
  12. Not much will change/undecided – 7%

Views on succession planning 

Wealth creates an obligation to support future generations

  • Agree – 84%
  • Neutral – 11%
  • Disagree – 5%

Succession planning is challenging as the values of the older and newer generations are hard to reconcile 

  • Agree – 40%
  • Neutral – 40%
  • Disagree – 21%

Most challenging aspects of succession planning 

  1. Challenging family dynamics – 51%
  2. Breakdown in communication – 35%
  3. Discomfort in discussing this sensitive subject – 33%
  4. The patriarch/matriarch is unwilling to relinquish control – 30%
  5. Lack of mentorship – 27%
  6. Infighting between family members – 22%
  7. Not knowing how best to construct a successful succession plan – 20%
  8. Health issues of the elderly generation – 18%
  9. Not having a fellow Next Gen member qualified enough or interested in taking over – 16%
  10. My voice is not heard – 11%
  11. Uncertainty about my/my children’s future financial security – 11%
  12. Feeling pushed into a role I’m not comfortable with – 6%

Views on succession planning with a breakdown by level of family wealth 

Succession planning is a difficult topic that we tend to avoid 

  • Agree – 32%
  • Neutral – 32%
  • Disagree – 37%

My family is not equipped to engage & develop the next generation of leaders 

  • Agree – 17%
  • Neutral – 32%
  • Disagree – 51%

The type of wealth education Next Generations have received 

  1. Experience working with professional advisors – 64%
  2. On the job experience at the family office/family business – 59%
  3. Informal training received inside the family/via the family office – 58%
  4. Formal education received at a university/ educational institution – 57%
  5. Structured education provided by the family office, financial institutions, or other third parties – 37%
  6. On the job experience at a finance or wealth management- related organization (e.g., investment bank, hedge fund) – 35%
  7. Social media- based education (e.g., YouTube, etc.) – 6%
  8. Other – 7%

The areas Next Generations would like additional support in preparation for succession 

  1. Better understanding of my role post- succession – 40%
  2. Education in key concepts of wealth management – 37%
  3. Improved financial literacy – 36%
  4. Improved communication skills – 35%
  5. Better understanding of investing – 26%
  6. Understanding what it means to be a trustee – 24%
  7. Working in the family office/ family business – 23%
  8. Experience working with professional advisors – 18%
  9. Understanding what it means to be a trust beneficiary – 18%

Whether Next Generations feel they/their family is prepared for succession: Next Generations vs Family 

  • Yes, somewhat prepared – 48% vs 51%
  • Yes, very prepared – 36% vs 21%
  • No, somewhat unprepared – 12% vs 20%
  • No, very unprepared – 4% vs 9%

Type of succession plan in place 

  • Formal written plan – 33%
  • Succession plan in development – 29%
  • Informally agreed, written plan – 13%
  • Verbally agreed plan – 11%
  • There is no succession plan – 7%
  • Don’t know – 7%

Views on wealth and family conflict:

Excessive wealth leads to family infighting 

  • Agree – 46%
  • Neutral – 37%
  • Disagree – 16%

Excessive wealth leads to family infighting – Below $250 million vs > $250 million

  • Agree – 42% vs 61%
  • Neutral – 45% vs 19%
  • Disagree – 13% vs 19%

Being born wealthy can cause family members to lose career motivation

  • Agree – 64%
  • Neutral – 28%
  • Disagree – 8%

Being born wealthy can cause family members to lose career motivation – Below $250 million vs > $250 million

  • Agree – 55% vs 78%
  • Neutral – 35% vs 17%
  • Disagree – 17% vs 6%

Being part of a successful family adds great pressure to live up to previous generations’ success 

  • Agree – 65%
  • Neutral – 29%
  • Disagree – 5%

Being part of a successful family adds great pressure to live up to previous generations’ success  – Below $250 million vs > $250 million

  • Agree – 58% vs 72%
  • Neutral – 39% vs 17%
  • Disagree – 3% vs 11%

Whether family wealth has become a matter of dispute 

  • No – 57%
  • Yes, somewhat – 35%
  • Yes, very much so – 9%

Governance tools to avoid family disputes 

  1. Regular communication – 66%
  2. Regular formal meetings (e.g., scheduled, with a clear agenda) – 39%
  3. Family consultant – 32%
  4. Formal policies & procedures – 27%
  5. Family constitution – 24%
  6. A family council – 23%
  7. Ongoing family training – 14%
  8. Other – 14%

 

3) Family Enterprise

Views on wealth providing opportunities 

  • Agree – 95%
  • Neutral – 5%
  • Disagree – 0%

Involvement in family business / family office

  • Family Office – 86%
  • Family Business – 55%

Average Age of Next Generation 

  • First job in the family business / family office – Age 26
  • Took a leadership role in the family business / family office – Age 32
  • Expect to assume (or assumed) control of the family business – Age 40
  • Expect to assume (or assumed) control of the family office – Age 44

Current involvement in the family business 

  • CEO, Managing Director – 24%
  • Director – 19%
  • Management / Executive – 29%
  • Board member – 33%
  • Some involvement (e.g., on project basis, work experience) – 22%
  • Involved in philanthropy – 32%
  • Family council member – 24%
  • Other – 16%

Whether respondents are satisfied with their current involvement in the family business/family office 

  • I’m satisfied with my current involvement – 54%
  • I’d like to become more involved in certain activities – 18% 
  • I’d like to increase my involvement overall – 14%
  • I’d like to decrease my involvement overall – 5% 
  • I’d like to become less involved in certain activities – 4%
  • Don’t know/ I am unsure – 3%

Views on Next Generation involvement in the family business

The next generation is happy to engage in the family business 

  • Agree – 46%
  • Neutral – 41%
  • Disagree – 14%

Preference to increase their role in the family business/family office 

  1. Investment strategy/ management – 42% 
  2. Financial planning – 38%
  3. Succession planning – 38%
  4. Philanthropy – 32%
  5. Family business management – 27%
  6. Legal – 22%
  7. Human resources – 16%

Preference to maintain their role in the family business/family office 

  1. Investment strategy/ management – 51% 
  2. Financial planning – 53%
  3. Succession planning – 52%
  4. Philanthropy – 52%
  5. Family business management – 51%
  6. Legal – 45%
  7. Human resources – 45%

Preference to decrease their role in the family business/family office 

  1. Investment strategy/ management – 5% 
  2. Financial planning – 6%
  3. Succession planning – 6%
  4. Philanthropy – 5%
  5. Family business management – 9%
  6. Legal – 22%
  7. Human resources – 21%

View on the primary purpose of the family office 

  1. Preserve family wealth – 32%
  2. Increase family wealth – 31%
  3. Build/ preserve family legacy – 18%
  4. Consolidate services/ advisors in one place – 10%
  5. Provide a forum for family interaction – 3%
  6. Aid succession – 1%
  7. Provide privacy around the family’s wealth – 1%

Most contentious issues when managing the family business/family office 

  1. Family members’ roles & responsibilities – 41%
  2. Business strategy – 36%
  3. Family members’ competence or commitment – 34%
    Family values and legacy – 22%
  4. Family members’ compensation – 21%
  5. Relations between family members & non-family members – 14%
  6. Business performance – 12%
  7. Ownership – 12%
  8. Don’t know – 8%

Next Generation intended changes once they assume control of the family office/family business 

  1. Switch to a more growth-oriented investment strategy – 34%
  2. Improve cybersecurity in the family office – 31%
  3. Shift towards alternative investments (e.g., private markets, hedge funds, commodities) – 27%
  4. Integrate new technologies (e.g., blockchain, artificial intelligence) into the family office – 24%
  5. More emphasis on sustainability/ESG investing – 24%
  6. Allocate more to emerging investments (e.g., cryptocurrency, NFTs, new tech) – 23%
  7. Allow for individual family members to have their own investment strategy – 23%
  8. Change long-term investment objectives – 17%
  9. Outsource more family office services – 13%
  10. Provide more family office services in-house – 9%
  11. Switch to a more preservation-oriented investment strategy – 7%
  12. Make working from home a permanent option – 7%
  13. No changes – 10%
  14. Don’t know – 16%

 

4) Wealth management and External Advice 

The person Next Generation are most likely to call with questions related to wealth management 

  1. Family office (e.g. accountant, attorney) – 26%
  2. Parent – 17%
  3. Dedicated Relationship Manager – 14%
  4. Close friend – 9%
  5. Spouse – 9%
  6. Other family member – 8%
  7. Mentor – 7%
  8. Other – 4%
  9. None, go online – 5%

Areas where professional advisors are needed most 

  1. Trust & estate planning – 99%
  2. Tax planning & mitigation – 97%
  3. Succession planning/wealth transfer – 63%
  4. Complex investments – 58%
    Asset allocation – 45%
    Cyber security, fraud mitigation – 44%
  5. Wealth education – 44%
  6. Managing family dynamics & decision making – 43%
  7. Wealth administration (bill pay, insurance, consolidated reporting, etc.) – 37%
  8. Budget/cash flow control – 28%
  9. Philanthropic planning – 21%
  10. Don’t know – 1%

We need external help in developing the family’s succession 

  • Agree – 52%
  • Neutral – 27%
  • Disagree – 22%

It’s hard to find a trusted external partner who can help us with succession planning 

  • Agree – 28%
  • Neutral – 29%
  • Disagree – 43%

Financial institutions Next Generation have a relationship with

  1. Private Bank – 78%
  2. Wealth Manager – 71%
  3. Commercial Bank – 70%
  4. Asset Manager  – 55%
  5. Online Brokerage – 42%
  6. Multi-Family Office – 23%
  7. Retail Brokerage – 22%

Use the same firm for banking & private wealth management

  • Different firm / organization – 58%
  • Same firm / organization – 20%
  • Prefer not to say – 22%

Next Generation use a different wealth manager from parents 

  • No, I use the same wealth manager as my parents – 35%
  • No, I use the same wealth manager as my parents, but have a different relationship manager – 3%
  • Yes, I didn’t want to share a relationship manager with my parents – 7%
  • Yes, but for another reason – 32%
  • I don’t use a wealth manager – 24%

Circumstances that would prompt Next Gens/their family to change their wealth manager 

  1. Change of relationship manager (retirement, leaving firm) – 49%
  2. Displeased with services offered – 46%
  3. Next generation succession – 42% 
  4. Sale of family business – 28% 
  5. Desire to diversify investments/managers – 24% 
  6. Desire for a wealth manager with more services/desire to consolidate services – 21% 
  7. Desire to diversify services – 20%
  8. Business acquisition –  18%
  9. Geographic diversification – 9% 
  10. Don’t know – 7%

Most important factors when selecting a wealth advisor 

  1. Trustworthy and responsive – 86% 
  2. Competitive fees – 58% 
  3. Access to alternative investments – 53% 
  4. Tax planning and mitigation – 51% 
  5. Fiduciary advice – 51% 
  6. Provides individually tailored solutions for clients – 46% 
  7. Employs experienced investment professionals – 41% 
  8. Trust and estate planning – 38% 
  9. Digital access to user-friendly service – 37% 
  10. Wealth management education – 32% 
  11. Cybersecurity, fraud mitigation – 29%
  12. Governance support for family decision-making – 22% 
  13. Offers guidance on sustainable investing / impact investing – 22%
  14. Digital trading platform – 16% 
  15. Don’t know – 4%

 

5) Philanthropy & Sustainability

The Causes Next Gens and their families support in their philanthropy – Next Generation vs Family 

  1. Education (e.g., childhood development, academic research) – 76% vs 74%
  2. Youth/children – 60% vs 59%
  3. Community development – 56% vs 63%
  4. Economic and social development (e.g., financial inclusion, entrepreneurship – 49% vs 37%
  5. Humanitarian causes (e.g., disaster relief, support for refugees) – 47% vs 46%
  6. Arts and culture – 44% vs 41%
  7. Environment (e.g., climate change, green issues, wildlife) – 43% vs 35%
  8. Political, civil, and human rights (e.g., civil liberties, freedom of expression) – 31% vs 31% 
  9. Health – 26% vs 43%
  10. The elderly (e.g., adult care, veterans, etc.) – 24% vs 22%
  11. Gender equality – 18% vs 16%
  12. Peace/conflict resolution – 12% vs 12%
  13. Sports – 12% vs 9%

Distribution channels of Next Gens and their families when giving philanthropically  – Next Generation vs Family 

  1. Give directly to a cause – 72% vs 45%
  2. Give to charity – 58% vs 45%
  3. Family foundation – 34% vs 57%
  4. Donor advised fund – 27% vs 25%
  5. 3rd-party foundation – 7% vs 12%
  6. Give via family office – 4% vs 12%
  7. Community foundation – 4% vs 10%
  8. Charitable trust – 4% vs 12%
  9. Family business foundation – 3% vs 12%

Most difficult challenges Next Generations face when engaging in philanthropy 

  1. Measuring the impact of philanthropic activities – 46%
  2. Identifying how to prioritize the causes you want to support – 41%
  3. Scaling up successful initiatives – 32%
  4. Developing a philanthropic strategy (e.g., time limited versus giving in perpetuity) – 25%
  5. Utilizing new philanthropic and financial models – 19%
  6. Finding partners to co-invest in initiatives – 8%

Motivations for Engaging in Philanthropy 

  1. I feel it’s my duty to give back – 74%
  2. My family has a tradition of giving – 66%
  3. I want to make a difference in my local community – 66%
  4. I want to have an impact and support sustainable change – 59%
  5. I have a personal or emotional connection to a cause or organization  – 57%
  6. Giving helps to build a positive family legacy – 51%
  7. I give in order to maximize my tax benefits – 31%

Societies dislikes beneficiaries of excessive inherited wealth

  • Agree – 69%
  • Neutral – 27%
  • Disagree – 4%

Donations in the last 12 months – Next Generation vs Family

  • More than $10 million – 2% vs 13%
  • Below $10 million – 9% vs 24%
  • Below $1 million – $2% vs 19%
  • Below $500,000 – 7% vs 11%
  • Below $250,000 – 32% vs 20%
  • Below $50,000 – 48% vs 13%
  • Average – $1.2 million vs $6.3 million

Next Geneneration expected proportion of personal wealth intended for philanthropy in their will 

  • Up to 100% – 5%
  • Up to 75% – 5%
  • Up to 50% – 5%
  • Up to 25% – 23%
  • 10% or less – 26%
  • Undecided – 32%
  • I do not plan to leave my wealth to charitable causes – 6%

Next Generation support same organisations as parents

  • Only some of them, I support other organisations too – 75%
  • Yes, for the most part – 15%
  • No, none of them – 9%

Views on philanthropy and sustainable investing 

Philanthropy and sustainable investing  help to build a bridge between older & younger generations

  • Agree – 45%
  • Neutral – 48%
  • Disagree – 7%

Next Generation views on sustainable investing 

Most popular sustainable investing strategies 

  1. Thematic investing (e.g., clean energy, gender equality, healthcare, water, etc.) – 53%
  2. Impact investing (financial returns with positive social or environmental impact) – 53% 
  3. Positive/ inclusionary investing in companies with good practices – 50%
  4. Integration of ESG factors into analysis and valuation – 47%
  5. Negative/ exclusion screening (e.g., no tobacco, no armament manufacturers) – 33%
  6. A combination of the above – 33%
  7. Active engagement (shareholder rights) – 11%

Average proportion of asset classes held in sustainable investing portfolios 

  1. Domestic public equities – 22%
  2. Real estate – 12%
  3. Venture capital – 13%
  4. Private equity direct – 13%
  5. Private equity fund – 13%
  6. Mutual funds – 9%
  7. International public equities – 6%
  8. Private debt – 2%
  9. Hedge funds – 2%
  10. Corporate debt – 1%
  11. Commodities – 1%
  12. Green bonds – 0%
  13. Other 5%

Sustainable investing is now a permanent feature of the investment landscape 

  • Agree – 68%
  • Neutral – 22%
  • Disagree – 10%

You do not have to sacrifice returns to invest sustainably 

  • Agree – 51%
  • Neutral – 36%
  • Disagree – 13%

I am more engaged in sustainable investing than my parents 

  • Agree – 53%
  • Neutral – 35%
  • Disagree – 12%

Motivations to invest sustainably 

  1. Responsibility to make the world a better place – 78%
    Increased awareness of importance of sustainability – 64%
    Demonstrate family wealth can be used for positive outcomes – 56%
  2. Influence of the younger generation – 44%
  3. Increased availability of sustainable investment opportunities – 42%
  4. Passion for a specific cause – 39%
  5. Ability of shareholders to engage company management on ESG issues – 19%

Proportion of investment portfolio dedicated to sustainable investing 

  • Current – 17%
  • Expected 2023 – 26%
  • 5 years from now – 43%

Views on challenges when investing in sustainability 

  • Agree – 49%
  • Neutral – 47%
  • Disagree – 4%

It’s difficult to find useful information on sustainable investment 

  • Agree – 37%
  • Neutral – 46%
  • Disagree – 17%

There aren’t enough good sustainable investments on offer 

  • Agree – 31%
  • Neutral – 58%
  • Disagree – 11%

Most difficult challenges faced when investing sustainably 

  1. Greenwashing – 53%
  2. Inability to deliver returns that are equivalent to traditional investments – 31%
  3. Lack of common knowledge around sustainable investment terms – 22%
  4. Inability to find good deals/adequate deal flow – 19%
  5. Inability to demonstrate an investment’s positive social/environmental impact – 19%
  6. Increased competition for high-quality deals – 19%
  7. Inability to demonstrate financial results – 17%
  8. Wider family does not support my interest in sustainable investing – 14%
  9. Other – 6%

It is important that my wealth advisor understands my values and customizes an investment portfolio centered around them 

  • Agree – 59%
  • Neutral – 32%
  • Disagree – 9%

I would like to be more involved in sustainable investing 

  • Agree – 45%
  • Neutral – 36%
  • Disagree – 18%

Most difficult challenges faced when working with an advisor to align the portfolio with respondent values 

  1. Insufficient tools to measure investments’ social / environmental impact – 38%
  2. Different views within the family on value-based investing – 34%
  3. Lack of investment options that reflect my values – 24%
  4. I am unclear about the values I want reflected in my portfolio – 14%
  5. My personal advisor does not sufficiently understand my values – 7%
  6. My family’s advisor does not sufficiently understand my values – 7%
  7. None – 14%

 

6) Digital Assets

Views on cryptocurrency / digital assets market 

Most popular digital asset investing 

  1. Fintech – 86%
  2. Biotech – 77%
  3. Healthcare tech – 63%
  4. Artificial intelligence – 58%
  5. Green tech – 57%
  6. Digital transformation – 57%
  7. Cryptocurrency – 57%
  8. Data centers – 43%
  9. Robotics – 45%
  10. Water tech – 30%
  11. The metaverse – 24%
  12. NFTs (Non-fungible tokens) – 16%

Motivation to invest in digital assets 

  1. Diversification from traditional investments – 78%
  2. To invest in an area before it becomes mainstream – 70%
  3. Potential returns more than offset the risk – 44%
  4. Inflation protection – 30%
  5. For fun – 26%
  6. Alignment of investments with personal interest – 22%
  7. Limited supply opportunity – 15%
  8. Immune from political interference – 7%
  9. Outside the reach of government – 4%

The security risk of owning digital assets is too high 

  • Agree – 41%
  • Neutral – 44%
  • Disagree – 15%

Cryptocurrency should be more regulated 

  • Agree – 62%
  • Neutral – 36%
  • Disagree – 3%

It is worth investing in cryptocurrency now, before it goes mainstream 

  • Agree – 26%
  • Neutral – 41%
  • Disagree – 33%

Average proportion of cryptocurrency/digital assets investments in portfolios 

  • Cryptocurrency – 5%
  • Other digital assets – 9%

Facilities for trading cryptocurrencies should be more widely available 

  • Agree – 27%
  • Neutral – 47%
  • Disagree – 26%

The cryptocurrency market is going to explode over the next 10 year 

  • Agree – 29%
  • Neutral – 56%
  • Disagree – 15%

The NFT market is going to explode over the next 10 years 

  • Agree – 15%
  • Neutral – 62%
  • Disagree – 23%
  • Average family net worth – $752 million

 

 

This study is based on quantitative and qualitative data sourced by Campden Wealth. Between March and July 2022, 102 surveys were collected from next generation wealth holders in the United States with a family net worth in excess of US$30 million – all of whom have recently or will soon assume control of the family wealth and/

or the family business or family office. The generations that dominate the sample are millennials (44%) and Gen X (33%) who account for over three-quarters of the respondent sample (Baby boomers make up 22% and Gen Z represent 1%). Furthermore, 12 in-depth interviews were conducted with Next Gen family members. Quotes from these interviews were used to create case studies and to provide deeper insight into the trends outlined by survey responses.

Report Profile

  • Total family net worth – $77 billion
  • Average expected inheritance – $200 million
  • Total expected inheritance – $19 billion
  • Total 102 UHNWIs 

Demographics

  • Millennials or Gen Y (1981 to 1995) – 44%
  • Gen X (1965 to 1980) – 33%
  • Baby Boomers (1946 – 1964) – 22%
  • Gen Z, iGen, Centennials (1996 onwards) – 1%

Generation

  • 2nd Generation – 52%
  • 3rd Generation – 28%
  • 4th Generation – 16%
  • 5th Generation – 4%

Relationship to Main Wealth Holder

  • Child – 53%
  • Grandchild – 14%
  • In-law – 11%
  • Niece / Nephew – 1%
  • Other – 21%

Ethnic

  • White America / European – 70%
  • Asian – 8%
  • Arab / West Asian – 3%
  • Black / African American – 2%
  • Other / None – 7%
  • Prefer not to say – 7%

Highest Level of Education

  • Master’s degree/MBA – 48%
  • Bachelor’s degree – 35%
  • Doctorate degree (PhD) – 9%
  • High school diploma – 2%
  • Further education – 1%
  • Some university credit, but no degree – 1%
  • Vocational qualification – 1%
  • Other – 1%

 




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