When it comes to preserving and growing their family’s wealth, intergenerational wealth transfer and succession planning are the topics uppermost in the minds of wealthy families across all regions, according to Julius Baer's Family Barometer, in collaboration with PwC Switzerland, revealing wealthy families’ main concerns in 2024.
The Family Barometer monitors the changing opinions of financial services experts who work with and advise wealthy clients. For the 2024 edition, Julius Baer canvassed more than 1,800 internal and external experts across Europe, Asia, the Middle East and Latin America – resulting in its most globally balanced survey to date.
Among the key findings, taxation is receiving greater attention among wealthy families across most regions, taking first place among the societal topics in this year’s survey. It ranked as the top concern in Europe, Asia, Latin America and the second highest in the Middle East.
Individual and family growth opportunities, particularly wealth education programmes for the rising generation, have become a greater priority for wealthy families. The Family Barometer revealed Europe and Latin America show a stronger preference for conducting family meetings with the involvement of professional advisers.
Across all regions, the most emphasised measure in preparing wealth receivers is their involvement in family and business decisions (23%), followed by wealth education (17%) and participation in investment decisions (17%).
Family governance remains crucial to maintaining and growing a family’s legacy. Affluent families surveyed ranked it as the third-most important topic in most regions this year.
The Family Barometer revealed that the top factor stopping families from having wealth transfer discussions with the wealth receivers is concern over family conflict (46%).
Political stability became a top three societal topic for the first time this year, illustrating concerns in wealthy global families about issues such as political polarisation and diverging economic tectonics
Drilling down a bit further these five topics below experts cited as those they most commonly discussed with clients beyond investments, ranked in order of importance:
1. Intergenerational wealth transfer and succession planning
This was this year’s top family-related topic across every region. As family businesses often play a significant role in regional economies, the emphasis on succession planning reflects a proactive approach to safeguarding their future. The increasing amount of wealth to be transferred and the international nature of today’s affluent families calls for a coherent plan across different jurisdictions.
For instance, we found that families in the Middle East reported the highest interest in discussing intergenerational wealth transfers with our advisors. Read more here about going global with succession planning and get further insights on our findings by accessing the Family Barometer 2024.
2. Taxation
Taxation is receiving greater attention among wealthy families across most regions, taking first place among the societal topics in this year’s survey. The global significance of taxation is shown by the fact that it ranked as the top concern in Europe, Asia and Latin America and the second highest in the Middle East. Recent political tensions and changes of government in several major economies mean that tax regulations are likely to continue to be front of mind for wealthy families in the near future.
Roger Stutz, Head of Wealth Planning at Julius Baer, sees a steadfast determination among wealthy families to navigate the changing global dynamics to preserve and grow their wealth.
3. Individual and family growth opportunities
These opportunities, particularly wealth education programmes for the rising generation, have become a greater priority for wealthy families. By educating heirs about the stewardship of wealth, families can diminish the risk that their wealth dissipates after one generation. Conducting family meetings with the involvement of professional advisors, which is strongly preferred in Europe and Latin America, reflects an understanding that external expertise can help families foster both personal development and financial acumen.
4. Family governance
This is crucial, in our eyes, to maintaining and growing a family’s legacy. The affluent families surveyed this year agree, ranking it as the third-most important topic in most regions this year. Despite the reportedly high level of professionalisation in governance structures, however, there remains a reliance on informal frameworks – highlighting a gap between the perceived level of professionalisation and the actual implementation of formal governance frameworks.
Learn more here about how good governance can map the direction of your family wealth and business and explore the insights in this year’s Family Barometer.
5. Political stability
Political stability became a top-three societal topic for the first time this year, illustrating concerns in wealthy global families about issues such as political polarisation and diverging economic tectonics. The more fractured global economy is reshaping the interactions between different jurisdictions and having a bigger impact on asset allocation. Naturally, when families face outside instability, they seek the guidance of professional advisors to increase the resilience of their wealth management strategies.
The report concluded: "Ultimately, the 2024 Family Barometer bears out last year’s indications that it has become a more uncertain environment in which to preserve wealth. Families are advised to look beyond short-term performance so that they and their wealth not only withstand unpredictable times but emerge stronger.
"This makes it all the more essential that they work with professional advisors to establish a solid financial plan – one which not only protects their wealth against the negative forces of market volatility, geopolitical turmoil and the resulting ‘unknown unknowns’, but also ensures their wealth remains abundant for future generations."
