With a multi-trillion-dollar wealth transfer under way, preparing upcoming generations for the responsibility remains a driving force in industry conversations. 

According to a new global survey of the position from UBS, some potential or actual inheritors don’t think that their parents prepare them early enough.

A total of 56 per cent of those surveyed think that parents should discuss wealth earlier with their children (13 to 19 years – 40 per cent; 0 to 12 years – 16 per cent). This is not to rush them into wealth responsibilities, but to help them understand what’s involved, UBS said. 

Out of those surveyed, one-third are already transferring pockets of wealth; 17 per cent are still thinking about it; and 11 per cent are just starting to plan. There are regional differences: European (42 per cent) and North American (33 per cent) next generation family members are already transferring clusters of wealth.

Zurich-listed UBS has issued a Global Next Generation Report, a 30-page study that draws on insights from more than 170 responses across two surveys with the next generation of inheritors, leaders and founders. With 49 per cent, Europe represents the largest share of respondents, followed by North America (19 per cent), Latin America (16 per cent), Asia-Pacific (11 per cent) and the Middle East and Africa (5 per cent).

Such reports come at a time when the bank says an estimated $83 trillion of wealth will change hands in the next two decades. One challenge for wealth advisors and banks is to ensure that they don't lose business as younger generations reassess how their family money is run or, if young, first-generation entrepreneurs decide to go for a new firm rather than one used by older peers. Firms are trying to get a handle on how, when and why families should sit down with their children to discuss wealth, prepare them for the future, and keep inheritors "grounded" so that they don't become spoilt or disconnected from the broad public.

The generational “depth” of a family will affect how particular cohorts view wealth transfer and responsibility. 

Among second generation family members 25 per cent say they have chosen their role in the family wealth story independently, although supported by their family. Among fourth generation family members, this falls to 13 per cent, suggesting that in later generations, participation is less purely self-directed.

“Preparing the next generation for future roles in managing family wealth is a key priority for many families, particularly those with an entrepreneurial background,” Anastasia Deryagina, head of global next generation solutions, UBS Global Wealth Management, said in the document. “While traditional paths, such as education within a specific field or industry, remain important, the next generation of business leaders and investors today have access to a wider range of opportunities and often explore different directions early on. In this process, networks play a critical role in long-term success, which is why we see them focusing on building their own connections and seeking peer guidance to navigate their responsibilities and shape their future role.” 

A responsibility, not a passing
Overall, slightly more next generation family members associate wealth transfer with taking on responsibility rather than the death of a family member (41 per cent versus 38 per cent). The regional breakdown, however, reveals clearer contrasts. In APAC and Latin America inheritance is more frequently linked to the passing of a family member, cited by around 60 per cent of respondents. 

UBS said that at the global level, many next generation family members recognise a sense of responsibility long before starting to discuss wealth as such, its meaning and purpose with their parents. 

Around 44 per cent first discussed wealth in early adulthood, 37 per cent during their teenage years, and just 17 per cent in childhood. 

Several young inheritors said they felt a weight of expectation long before a word was spoken about wealth. As one put it: “You feel a sense of responsibility from a very young age. Even when parents never talk about the wealth, you feel it,” the report said.

Two-thirds of next generation family members (65 per cent) became involved in managing the family wealth as young adults.

Among the findings there is an exploration of how open or not families are about inheritance.

Only 6 per cent of the next generation feel they know little about their family’s wealth and succession plans. However, most are somewhere in the middle: 19 per cent report partial knowledge, while 38 per cent say they have good visibility and take part in discussions.

In a finding that chimes with what this news service hears, families with generational depth tend to have reported more structured conflict resolution schedules versus those who are closer to the wealth-generating generation (50 per cent vs 7 per cent). Also, they move away from a single decision-maker towards established governance processes.

Age and guile
UBS touched on a sensitive issue for private bankers and wealth managers – how likely or not are upcoming generations to use their parents’ and grandparents’ banks?

When succession planning involves private banking partners, continuity is important: 41 per cent prefer to work with their family’s existing bank. Yet flexibility is still on the table – 31 per cent want a new provider and 29 per cent are open to switching. 

UBS quoted a next generation portfolio manager as saying: “Our advisors have worked with us for 15 to 20 years. Good partners aren’t easy to find. When we do find someone who is committed and trustworthy, we want to work with them for the long term.”

How wealth and investments are managed
The report asked how its survey cohorts manage wealth. Some 37 per cent said they use a single-family office; 29 per cent said they used a private bank/wealth manager; 27 per cent run their wealth themselves; 5 per cent said they preferred not to say, and 1 per cent used a multi-family office.

Gender
UBS noted that gender differences also emerge when choosing with whom they work or whether to manage wealth directly.

Women are more likely than men to work with a wealth manager or private bank (45 per cent versus 21 per cent), while men show a stronger preference for managing wealth directly (33 per cent) or using a single-family office (42 per cent). Across the survey, this pattern suggests that women place greater value on personal fit (85 per cent versus 58 per cent) and more frequent engagement (34 per cent versus 14 per cent) – qualities typically associated with wealth managers and private banks.