Wealthy Migrant Families Focus Too Much On Current Tasks, Ignore Future Strategy – ANZ Private Bank

Tom Burroughes Group Editor 13 June 2024

Wealthy Migrant Families Focus Too Much On Current Tasks, Ignore Future Strategy – ANZ Private Bank

This news service has interviewed the private banking arm of ANZ for an Australia and New Zealand angle on attitudes towards family wealth, governance, transfer, strategy, and more.

ANZ Private Bank, part of Australia and New Zealand Banking Group, or ANZ, said its research has shown that the next generation of wealth inheritors coming to Australia from overseas is more inclined to follow their own path. Nearly a third of 18 to 35-year-olds inheriting family wealth are determined to use their inheritance to “do their own thing,” moving away from their predecessors’ traditional approaches. In one finding, the study showed that 21 per cent of families don’t hold family meetings – ever. 
This news service interviewed Ofer Greenberg, ANZ’s head of the private office business, about its work in this area. 

Ofer Greenberg

WealthBriefingAsia: ANZ research shows that only three in 10 family offices are ready for inheritance and have plans in place for transfer. Given how often the importance of wealth transfer is stressed, why is the lesson not getting through? What’s the issue?
Greenberg: Often high net wealth individuals are too strongly focused on the present to give the future the full attention it deserves. 

With so many questions to consider on how to pass on wealth, it can be a daunting decision to begin approaching conversations about wealth transfer. It’s easy to put this process off as the decisions become overwhelming without a clear roadmap for the family’s future. 

One of the most common concerns we hear among our clients is how this future planning, and conversations around the next generation’s inheritance, will impact family unity – but avoiding these conversations only delays, and often worsens, the risk of related family conflict. ANZ Private recently released our Next Generation Wealth Transfer Report (1), which found that 21 per cent of private bank clients never hold family meetings. From our experience, and the experiences of our clients, starting a frank, open and early dialogue between generations can help smooth the transition and prevent friction between family members.

WBA: What approaches does ANZ have to try to engage families, including younger adults, to have conversations about business/wealth and getting people prepared? Any specific examples from real life that you can provide (can be an anonymous client case)?
ANZ Private approaches wealth transfer planning as an opportunity to begin the conversation between high net wealth Australians and their families. As our clients’ trusted advisors, our goal is to provide a solid foundation on which they can build a strategy tailored to the individual needs of their family. 

ANZ Private brings a unique perspective, working with business owners, family offices and private clients to understand their individual needs. Our research found that 29 per cent of family members aged 18 to 35 want to make their own path, which reflects our understanding that each situation is different and needs a tailored approach to support the next generation. 

Each generation involved in the wealth transfer process has something at stake, so it’s important to come to the discussion with an open mind and encourage a two-way conversation. The younger generation might not share the same priorities as their older family members. Getting on the same page with how the inheritance can help to protect and build a legacy that all parties are proud of will significantly reduce the risk of family conflict and reduce the burden of wealth management that many young family members experience. 

WBA: What sort of help do you see families/younger adults/others asking ANZ for most? Have you noticed specific themes emerge?  
: While clients have a wide range of motivations for seeking professional support, some of the common reasons that Australians engage with ANZ Private include a desire to protect their legacy, to minimise family conflict during wealth transfer, or to manage their estate through changing circumstances.

No matter what stage of the planning process they’re in, most clients seeking out a private wealth advisor are looking for guidance on how best to prepare the next generation to best manage their inheritance. 

Among the high net worth families that we work with at ANZ Private, we are seeing key generational trends emerge. Older clients, who are typically in the process of planning their wealth transfer, are often most concerned with ensuring that the next generation is prepared to inherit the responsibilities associated with controlling the family’s wealth. For these clients, family unity is a top priority, so their wealth advisor must distribute their wealth accordingly. 

Younger family members are often in the process of setting up their life, so common services ANZ Private often supports with include:

-- Our expertise in complex home lending; 
-- Commercial property financing; 
-- Luxury asset financing; and 
-- Share-backed loans. 

We regularly see younger clients seeking advice on their next steps, as they juggle their financial goals with pressures to carry on their family legacy. 

WBA: Do you see a lot of bewilderment/confusion among families over the range of trusts and other structures that can be used for wealth and estate planning/structuring? How can this be improved?
: Faced with a range of structures that families can adopt to support their wealth, it can be confronting and confusing to decide what might be best for you. Having the right advisors to help navigate through this complexity is critical. The best way families can understand what structure is best for their unique situation is to speak with an ANZ Private wealth advisor. We recognise the unique needs of high net worth clients, enabling us to create bespoke solutions using our differentiated policies to meet their specific requirements and objectives.

Growing a strong relationship with your ANZ Private advisor is the best way to ensure that your wealth structure is tailored and adjusted to your current and future needs. Our focus on a client’s needs, in-house investment capabilities and ability to support financing complex lending requests can help to simplify financial management and ensure clients have a simple structure.

WBA: An important task for a wealth management consultant is helping to set clients’ expectations about what is realistic in their plans. How big a part does “coaching” the client play at ANZ? Does this mean that you have recruit certain types of advisors? Are you having to recruit and bring in more women, for example, to deal with female wealth holders and entrepreneurs?
: ANZ Private advisors are experts in wealth management, experienced in supporting families through the process of passing down their assets to ensure their continuing legacy. Our advisors recognise the unique needs of our high net worth clients and tailor their advice accordingly.

The demographic of Australia’s high net worth individuals is changing. We’re seeing more females holding and passing down wealth, as well as a broader cultural mix than we've seen previously, which is reflected in ANZ Private’s diverse team of advisors. Our team has a broad mix of backgrounds, so they’re able to understand different cultural norms and aspirations to relate to our clients' diverse needs.  

Broaching conversations on wealth transfer demands significant sensitivity from all involved, requiring ANZ Private advisors to build trusting relationships and navigate emotional situations with their clients. 

WBA: About ANZ Wealth Management team: What does the private office of ANZ do? What are its business areas? Within what part of ANZ does the private office sit? Does the private office have a rough ratio for how many clients each of its staff should look after?
: The ANZ Private team works with many of Australia’s ultra-high net worth families and helps to plan, manage, preserve and grow their wealth. As part of the broader ANZ Banking Group, ANZ Private provides clients with a personalised relationship and access to a range of solutions, tailored to their specific needs.

Services span investment and strategic advice, transaction banking and complex structured lending across multiple asset classes. ANZ Private clients may benefit from the insight of the 15-person chief investment office that manage in excess of A$9 billion ($5.95 billion) in funds under advice.


1,  The Private Wealth Network 2022 Membership Survey, sponsored by ANZ Private

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