Our survey reveals what the rising generation of affluent families is looking for in a financial services provider, as well as their appetite for risk and when they start to invest. What it shows is that the young affluent are not so different when it comes to financial services to the rest of their age group – they are looking for fast results and competitive pricings. Yet they also value the reputation of financial service providers, which suggests that they prioritise the importance of relationships and trust for managing wealth over time. For the full list of requirements, explore our report.

Trading portfolios of up to USD 2 million

In our experience at Julius Baer, parents often give the young capital to invest in order to learn about financial markets through experience. This is confirmed by the survey. According to more than half (55%) of survey respondents, the rising generation most commonly starts making the first substantial independent investments between the ages of 26 and 35. Even before this time, though, many have already experimented with smaller sums.

“When we first get introduced to our client’s heirs at a young age or have them attend one of our programs, they often don’t know the first thing about investing but that changes,” explains Kevin Tay, Group Head South East Asia at Julius Baer Group Ltd. “Yet, we see regularly that clients give their children small amounts of capital to try out trading. That’s very often how it starts.” Explore the full statistics we’ve discovered in our Family Barometer.

What about the rising generation’s approach to succession?

It’s said that you can’t always control the outcome but you can control the process. The same is true for affluent families seeking to manage their next generation’s development and eventual succession.

That’s why families that take a systematic approach are more likely to see their children build fulfilling futures that carry forward the family legacy.

Our survey portrays just such an organised approach to the ‘rising generation’. It shows families giving their young adults greater responsibility one step at a time: starting with decisions about the management of family wealth and interacting with the family advisors, before moving on to having a say, or voting right, in important family decisions. For the full results of our survey, explore our report.

Managing this progression towards succession is, by nature, a refined process that’s unique to every family and every heir. It requires intelligent planning and management, with the avoidance of many potential pitfalls.

It’s a long-term game

In our experience, it is crucial not only to plan for passing on wealth — which is a difficult task that requires forward planning — but also to prepare the members of the rising generation. For that, it is crucial to create a common understanding of values and goals.

As David Durlacher, CEO of Julius Baer International, puts it: “Clients, like businesses, need to ask bigger questions than just how much money they want to make over a particular timeframe. Questions like: what is my purpose? What is my impact upon the world? What is my impact on my community, my impact on my family? What is the fundamental purpose of my wealth?”

Hearing the children’s views

But when is the right time to hand over some responsibility? While every family’s situation is different, it’s evidently a mistake to wait for too long. At Julius Baer’s recent Young Partners community program, this was a key topic that attendees were hungry for information about. They wanted to know how family governance structures could be adapted for them to fit in.

Often the subject of money is taboo in affluent families, causing feelings of guilt about having more than others or worries about a lack of parental trust. “Often parents never raise the topic of money, which can have a psychological effect on the kids,” relates Sandra Wassermann, Head of Client Communities.

“And that’s an everlasting thing because ’my parents didn’t tell me, so I don’t dare to ask’. Then, of course, if you don’t dare to ask questions, you’re actually not dealing with the topic.” For details on how wealthy families tackle these situations, explore our report.

The business of learning

An essential part of ensuring that the rising generation reaches its full potential is education – whether practical or academic. This equips the young not just to be fulfilled in life but also to learn about the purpose and management of a family’s wealth. According to the survey, the top three learning vehicles are: firstly, involvement in the family business; secondly, education, whether school or university; thirdly, talking to the family advisor.

Binding the family together

It’s a theme of the last few years that with the mounting complexity of international families’ circumstances on the one hand, and increasing taxes and regulation on the other, there’s a far greater need for professional advice. Nowhere is this truer than in planning inheritance.

But advice goes beyond purely financial matters. It can also help to ensure that families retain their wealth and their guiding characteristics down the generations. Finding a common purpose can bind a family together.

“The fundamental objective for both a client and their wealth manager is to understand the real purpose of wealth”, notes David Durlacher. “It’s important that successors understand they are not only inheriting wealth, but also a shared family purpose and legacy. Fully understanding what the wealth stands for will also help to sustain it.”