14
Wealth - X/NFP Wealth Transfer Report Launch Tom Povedano Chief Operating Officer, PartnersFinancial
Wealth-X/NFP Wealth Transfer Report Launch
Tom PovedanoChief Operating Officer, PartnersFinancial
WEALTHX.COM
PRESENTED BY LINA PUGLIESE
Sept. 12, 2016
PREPARING FOR TOMORROW: A REPORT ON FAMILY-WEALTH TRANSFER
WEALTHX.COM
3
For those transferring their wealth in the next decade, securing a legacy is not only fundamental, it’s imminent
Opportunities abound for the service professionals in this space; but
Understanding the pertinent issues and challenges facing the ultra-wealthy in transferring wealth is paramount
Preparing For Tomorrow: A Report On Family Wealth Transfer 2016 highlights most of these issues and challenges
Introduction
Shirtsleeves to shirtsleeves in 3 generations From the stable
to the stars to the stable
Clogs to clogs in 3 generations
Rice paddy to rice paddy in 3
generations
WEALTHX.COM
4
Wealth transfer – some basics
$3.9 trillion in wealth will be transferred to the next generation in the next decade*
Equal to 13% of all UHNW assets; or
Enough to purchase the ten largest companies in the world outright
*Sourced from Wealth-X proprietary Family Wealth Transfer Model
By 2020$46 trillion
2015$30 trillion
54%
WEALTHX.COM
5
Sizing the ‘wealth transfer’ UHNW individual
14,000+UHNWIs are likely to transfer assets in the next ten years
This is larger than the total
UHNW population in
China (12,020) or the UK (10,650)
WEALTHX.COM
6
Succession and inheritance issues are keeping the UHNWIs awake at night:
The importance of wealth transfer and challenges faced by UHNWIs
The family conversations need to be had and the time to plan is now
The conversation on ‘balance’ broadens…transferring enough to do something but not so much to do nothing
The importance of legacy is a force enabling the UHNWIs to create a lasting impact
WEALTHX.COM
7
35% 35%
21%
9%
36%
24%
34%
6%
Private Holdings Public Holdings Liquidity Real Estate & LuxuryAssets
All UHNWIs Wealth Transfer UHNWIs
$49m$98m
$49m $66m $30m $13m$92m $16m
Average Asset Holdings Worth ($m) per UHNWI
‘Wealth Transfer’ UHNWIs are wealthier across all asset classes
Averag
e A
sset
Hold
ing
s (
%)
WEALTHX.COM
8
Illiquid assets like property and private business can complicate wealth transfer – especially where geographies are spread
Opportunities abound for the service professionals in this space
Illiquid assets – it’s complicated
WEALTHX.COM
9
Business transitions
Private investments account for over one third of the ‘wealth transfer’ UHNW individuals’ net worth
Complexities abound when most of the wealth is in a single, private, illiquid asset
• level of involvement in the business (if at all) by the children; and
• distribution of assets
Then, come the family disputes
Advisors and planners have a highly sought role to play - encourage families to start the conversations sooner rather than later
Wealth transfer of business – it’s complicated
WEALTHX.COM
10
Similar to private businesses, property transfer is complex - it’s illiquid and indivisible
This is further complicated for the global UHNW citizen subject to varied tax liabilities
Advisors have a crucial role to play – keeping abreast of changes and providing solutions accordingly
Collaboration - across all advisors and stakeholders is key to a successful property transfer
Wealth transfer of property – it’s complicated
WEALTHX.COM
11
Preparing for the new normal – change and the unknown
Despite pre-planning, external challenges impose a new set of complexities
UHNWI priorities shift from wealth creation to preservation - including avoiding political instability
Diversification is key – hedging risk to avoid exposure to a single country, currency, asset or industry
The flipside is navigating the constantly changing tax liabilities across jurisdictions
The demand is high for expert advisors who can collaborate to help manage a continued, uncertain landscape
WEALTHX.COM
12
Growing global asset disclosure and reporting requirements are key concerns for UHNW families
Compounded by global socio-economic and political instability, this extends concerns beyond asset protection
Confidentiality and personal safety are being compromised for catchy headlines –confusing ‘secrecy’ for ‘privacy’
Disclosure and reporting requirements are also compounding concerns around privacy, as well as ease of doing business
In a world of growing transparency, certainty is opaque
WEALTHX.COM
13
The way forward
1. Plan early
Challenges in transferring wealth for UHNW families are multiple and complex – to optimize success:
2. Diversify to preserve
3. Utilize the suite of specialized advisors
4. Ensure communication and
collaboration
WEALTHX.COM
WEALTHX.COM
TO DISCUSS OUR UNIQUE SERVICES, PLEASE CONTACT:
Lina Pugliese
+1 877 887 8454
Anthony Cole [email protected]
