Are Millennials ready to take over the family business?
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Over half of wealth creators do not trust the next generation to manage the family business, says Barclay’s Challenges and Opportunities of Intergenerational Wealth Transfer report.
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Keep in the family, the saying goes. But what if the trust is lacking? When it comes to succession planning, the younger generation is a great source of concern for their wealthy elders, 57% of whom do not believe their heirs will be able to manage the family business successfully once they inherit it, says Barclays latest report.
The bank stresses the importance of understanding family wealth dynamics and the key role they play in our society. “Over the next decade, the world’s wealthiest individuals will collectively transfer more than $15 trillion to their families – a sum greater than China’s entire GDP1,” the report states.
Are Millennials too risk-taking?
60% of wealth creators believe that the younger generation, between 24 and 39 years of age, is not ready to take over the family business. 63% of them affirm that millennials are not as concerned about preserving family wealth as their elders are.
For Mark Tucker, Global Head of Wealth Advisory at Barclays the generational rift truly is at the heart of tensions. “The older generation are likely to be thinking about wealth preservation, whereas, say, a 25-year-old has a completely different time horizon and will be thinking about wealth accumulation,” he says.
The report also draws light on the impact of cultural background and studying abroad on the perceived untrustworthiness of the younger generation. 58% of wealth creators believe that the younger generation’s cultural diversity is a source of conflict.
However, for Mark Tucker Millennials’ open-mindedness is to be cherished. “The older generation tends to avoid change and prefers to stick with things and ideas with which they are familiar. It’s therefore important for the younger generation to communicate the potential positive impact of new business perspectives that can come from traveling abroad,” he says.