Family Offices need advice on estate planning: survey
What do you want to know
- More than half of participants said succession planning is difficult because the values of older and younger generations are difficult to reconcile.
- Three-quarters said the next generation is more focused on ESG and responsible investing.
- Wanting to give back is the main motivation of 69% of family office philanthropists, but they also expect concrete and tangible benefits.
Growing generational differences and growing economic and social disruption are causing family office leaders to adjust their approaches in a number of areas, including succession planning, investment and philanthropy management, according to a investigation released Thursday by BNY Mellon Wealth Management Global Family Office.
“The past few years have been unprecedented, marked by pandemic-induced economic turmoil and growing social and political debate, which has brought discussions about the role of wealth to the fore,” Vincent HayesGlobal Head of Family Office at BNY Mellon Wealth Management, said in a statement.
“This has brought us to a tipping point – while big changes are underway, the scope of what these organizations need to accomplish has also expanded dramatically.”
The Harris Poll conducted the online survey from Oct. 14 to Nov. 8 among 200 key staff of global family offices managing at least $150 million in assets, and received responses from some 120 of them. .
Reconciling different generational values
More than two-thirds of family office respondents said succession planning was extremely or very important. At the same time, 42% acknowledged that succession planning is a difficult topic and the tendency is to avoid it.
More than half of survey participants said succession planning is difficult because the values of older and younger generations are difficult to reconcile.
Three-quarters said the next generation is more focused on environmental, social, governance and responsible investing, and said the next generation is more willing to give up some benefits in the name of social good.
Other obstacles also impede succession planning. Forty-five percent of family offices believe next-generation leadership is generally more difficult to engage due to their own family or career responsibilities, and 25% said they are not equipped to engage the next generation of leaders.
Many family offices interviewed also attributed the challenges of succession planning to a lack of expertise and the difficulty of obtaining reliable advice. Forty-two percent said they needed external help to develop an effective succession plan, and 39% said it’s difficult to find a trusted external partner to help them with succession planning.
Almost ready for crypto
According to the study, 77% said they were engaging in cryptocurrencies by investing in or exploring them, and 72% of those who actively invested in cryptocurrencies said they planned to increase their exposure. And 64% say cryptocurrency meets the aspirations of next-gen investors.
The study explored what motivates family offices to incorporate cryptocurrencies into their portfolios. Seventy percent said they did so to keep up with new investing trends, and 45% cited interest from the next generation of family office successors.