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Next-gen report discovers a generational disconnect in succession readiness

The Next Generation Of Wealth Holders In The United States 2022
By Glen Ferris

The next generation of ultra-high-net-worth family wealth holders overwhelmingly indicate they are ready for succession, according to The Next Generation Of Wealth Holders In The United States 2022, a new report from Campden Wealth and BNY Mellon Wealth Management.

Of the 100-plus next-gen family members interviewed for the study – who come with a total estimated family net-worth of $77 billion (with an average of $752 million per family) – 85% said they feel either very or somewhat prepared for transition of wealth and responsibilities. Next gens believe they are prepared to take charge, but are they really? Campden Wealth’s Global Family Office Report 2022 (released in three parts – North America, Asia-Pacific and European) discovered that only 39% of family offices believed next gens are adequately prepared for succession.

“The report shows a number of interesting findings, but what struck me most is that next gens are keen to invoke change when they take control of the family enterprise,” says Dr. Rebecca Gooch, Campden Wealth’s senior director of research. “They have a higher risk appetite than the current generation, as more than one-third of next gens report that once they take control of the family office / business, their top priority will be to switch to a growth-oriented investment strategy.”

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Of the next-gen ultra-high-net-worth wealth holders surveyed (all of whom have recently or will soon assume control of the family wealth), nearly a third believe that the primary purpose of the family office is to preserve (32%) and/or increase (31%) the family wealth. 54% of those surveyed are happy with their current role in the family office / family business, with 33% serving as a board member and 32% active in their family office philanthropy.

However, many next gens have an appetite to get more involved, with a preference towards strategic and finance-related positions, ranking investment strategy and management on top (42%), followed by financial planning (38%) and succession planning (38%).

“Next gens are being prepared for succession in a multitude of ways,” says Dr. Gooch. “They often receive exceptional educations, earning advanced degrees, such as MBAs, from top universities. It’s common for them to gain work experience in financial firms, such as investment banks or hedge funds, before joining the family business or family office. Some also undertake personal training from their family office or outside firms and they often attend workshops and utilise their family’s social networks to advance their learning. With that said, not all next gens are getting such in-depth training, as indicated by our research.”

When it comes to easing conflict, next gens want to be part of the solution.

Despite respondents’ eagerness to engage, their family members’ roles and responsibilities (41%) and concerns over business strategy (36%) pose obstacles to a smooth wealth transfer. According to 44% of respondents, families with a net worth above $250 million more readily agree that succession planning is a complex topic they tend to avoid, while only 21% of those with a net worth below $250 million would agree.

“When it comes to easing conflict, next gens want to be part of the solution,” says Vincent Hayes, global head of global family office at BNY Mellon Wealth Management. “With two-thirds of respondents (66%) believing in the power of regular communication and another 63% seeking external support for their succession planning / wealth transfers, this group is focused on taking active measures to maintain harmony and continuity.”

Despite some concerns about their preparedness, next gens have an appetite for growth and a vision for shaking up the family enterprise. Once in control, 27% plan to shift more towards alternative investments (such as private markets, hedge funds, commodities etc), while another 24% want to integrate new technologies into the family office.

“Amid economic uncertainties, the next generation of wealth holders are moving away from conservative investment approaches and embracing non-traditional strategies,” says Rajesh Nakadi, head of investments, Global Family Office at BNY Mellon Wealth Management. “This group is eager to tap into new asset classes, technologies and sustainable investment strategies to leave their mark on their family legacy.”

“Next gens tend to be trend seekers and trendsetters,” says Dr. Gooch. “In turn, they are often early adopters of new technologies. They frequently want to enter a space when it’s immature, so as to capitalise on lower entry costs in the hopes that one day their investments will mature and their returns will skyrocket. Digital assets and cryptocurrency are no different.

“In 2020, we reported that family offices’ average cryptocurrency investment returned a stark 40%, and in 2021 it was 11%. Since then, the value of cryptocurrency has plummeted. However, a lot of money was made for these ‘Speculative investors’ during its rise and many still believe that, despite the market’s significant volatility, it has a promising future. In turn, many next gens want to stay invested or even invest now while values are low. But, importantly, they typically only invest a very small proportion of their portfolios to these speculative investments, therefore they are hedging their bets and limiting their risk.”


Sustainable investing is a relatively young, but rapidly maturing space.


Driven by a desire to diversify from traditional investments (78%) and to invest in an area before it becomes mainstream (70%), respondents see value in investing in digital assets/new tech when assuming control. Within the next year, next gens plan to increase their exposure to artificial intelligence (60%), fintech (60%) and robotics (53%).

Furthermore, 51% of those surveyed believe one does not have to sacrifice returns to invest sustainably and more than two-thirds (68%) assert that sustainable investing has become a permanent feature of the investment landscape. 56% currently invest sustainably, with 53% of respondents employing a thematic investing strategy and another 53% pursuing an impact investing strategy.

“In many cases, the next generation initiates the conversation about sustainable investing with the family and family office,” says Dr. Gooch. “Similar to philanthropy, it’s a topic that can help bind families together, as they coalesce around a shared goal of creating positive social or environmental change. Older generations often learn from those younger about issues that will impact forthcoming generations most, such as climate change, while those younger learn about investing from others more seasoned.”

“Sustainable investing is a relatively young, but rapidly maturing space. The majority of the next gens we surveyed asserted that sustainable investing has become a permanent feature of the investment landscape.

“This generation is acutely aware of the dangers of global warning, the rise in natural disasters and the impact of Covid-19. Given that we are in the midst of a major generational transition, next gens are rapidly assuming control of the family enterprise and wealth and they are ready to take risks and implement new strategies to effect positive change. They are worried about the world we live in and the world their children and grandchildren will inherit, and they want to use their influence for the better.”

Click below to find out more about BNY Mellon Wealth Management and Campden Wealth’s The Next Generation Of Wealth Holders In The United States 2022 report below.

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