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Inside the Great Wealth Shift · UBS Trending

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  The great wealth transfer is underway and it's not slowing down.
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  $83 trillion is set to be passed on to younger generations.
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  So what's really different about this moment?
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  And how can families avoid the pitfalls
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  and prepare for succession?
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  We're going to break that all down for you
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  and a lot more right now on UBS Trending.
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  Hey everybody, and welcome to the UBS
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  Trending. I'm Anthony Pastore. Thanks for joining us today.
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  My guest in the studio is Libby Stantial, my friend and longtime
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  colleague Libby. Nice to have you here in the studio.
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  Good to see you. So good to be here, Anthony. Thank you.
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  So I wanted to talk to you
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  and your team have been working
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  really hard
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  on this next gen report that focuses on this great wealth
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  transfer that we have been talking about for a few years now.
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  It's here. It's underway.
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  I mentioned right in the intro, $83
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  trillion over the next 10 to 20 years.
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  What's interesting about this
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  is that if you look back at history, it's a lot different today.
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  People are certainly living longer.
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  There are real estate values have gone up.
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  Assets in their portfolios
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  have certainly increased exponentially over the last few years.
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  But to ask you the question, as we get started today,
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  what's different about this time, particularly related to that
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  wealth transfer?
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  Yeah, absolutely. You said it.
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  And what's so interesting about this particular wealth transfer?
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  I feel like even outside of my work
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  at UBS, I'm hearing it everywhere.
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  It's part of headlines and CNBC in the Wall Street Journal.
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  So it's very timely that we're having this discussion.
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  And we have a lot of resources
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  at UBS helping clients navigate these conversations.
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  As you said, 83 trillion.
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  That's almost three times the size of the US GDP.
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  And most of that 83 trillion is going to be
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  transferred in the United States about 29 trillion.
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  So the scale and the size alone make this truly unprecedented.
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  But when you put the numbers aside, what's really interesting
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  and makes this different is how the wealth is being transferred.
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  First of all, wealth, as you may think, it
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  travels in multiple directions.
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  So there's intra generationally between spouses.
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  We call that the horizontal wealth transfer.
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  And then there's what
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  what you're thinking about and what you pointed out that wealth
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  being transferred vertically to the next generation.
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  So thinking about multiple populations
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  and different people who are coming into this wealth
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  for the first time.
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  Additionally, you know,
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  as you said, people have longer life expectancies.
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  We work with many clients who, thankfully, are involved
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  professionally and personally
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  in their family's lives
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  for decades longer than they've been before.
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  So in that sense, wealth transfer sort of implies a one time act.
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  It's really not that one time act.
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  It's a wealth transition over multiple generations and decades
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  that families are having these conversations.
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  You also said baby boomers, Gen Z, millennials,
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  which is certainly true in
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  the majority, is going to be passed on from those generations.
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  But it's actually Gen X and baby boomers
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  as well, receiving wealth, for some of the first time.
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  So it's less about age when it comes to the wealth transfer
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  and more about preparedness and responsibility.
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  As the primary drivers and feeling of that wealth transfer.
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  Right.
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  In the United States, almost 70% of our survey respondents
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  associate wealth transfer with a shift in responsibility,
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  not a major life event.
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  You know, which is certainly important.
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  We'll talk about that later. But,
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  more than any other region, it culturally we feel that shift
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  and responsibility much more,
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  which is why we see this as much more of a journey over time.
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  Yeah.
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  And, you know,
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  I think
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  people automatically assume when you talk about wealth transfer
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  through the generations,
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  it means that it's being passed on after that loved one
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  passes away.
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  It's not actually just that it's happening
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  while they're also living.
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  So they're living while giving
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  or giving while living is probably the better way to say it.
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  So there's so many different nuances of this,
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  and I do want to point out if we can pull that chart up again,
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  from the control room,
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  you just talked about that 67% say it's a responsibility shift,
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  and then that 17% passing of a family member opportunity.
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  Those are really interesting pieces
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  that, again, we're in this next
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  gen report that you and your colleagues have put together
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  had survey
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  respondents global report, taking a look at the US results.
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  I find this to be really fascinating.
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  That is a huge skew
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  in one direction to have that top one be at 67%.
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  Yeah, about the average I believe was in, the 40% or 50%.
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  So it does stand out a lot more in the United States.
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  And it is interesting when you look at different cultures, how
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  they interpret shifts and responsibility and wealth transfer.
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  I said already that the greatest wealth transfer is happening
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  in the US.
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  So, a lot of opportunity and, space for us to help.
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  Yeah. For sure. Yeah.
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  I mean, that's
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  one of the things we always talk about here being,
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  you know, under the roof of UBS and under the, the,
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  you know, the keys as you were, as they were.
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  We do have a lot of resources and staff and people around
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  who can
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  assist our clients
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  and prospective clients in all kinds of journeys,
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  including this one.
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  So let me ask you this because, you know,
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  this is probably something we pulled out from the report.
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  If if you know, it is a journey we talked about wealth
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  transfer is a journey.
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  Where are our clients that were surveyed in this report
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  on their journey?
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  What what were they talking about while they were taking
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  this particular survey? Where did you find them? Yeah.
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  So about a third are already
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  in the middle of a wealth transfer, which is great,
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  but almost about half are either in the planning stages
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  with their advisors and even some haven't started at all.
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  Almost half.
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  Wow.
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  So that's a
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  that's probably bigger than you would have expected right.
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  Yes. Yeah.
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  I mean sometimes based on the demand that we,
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  we hear from clients
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  in these conversations happening all the time.
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  It doesn't surprise me in some ways,
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  but it's more reassuring for everyone else out there
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  who might think like, oh my gosh, I'm too late.
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  I haven't started.
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  Nope. You're you're right where you're meant to be.
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  And, most are in the beginning phases of this transfer, right?
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  The biggest catalyst, as we've talked about
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  is taking on more responsibility.
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  After that,
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  I mentioned life events briefly, but that is the reality.
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  There's beautiful life milestones that happen, marriages, births,
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  more difficult family times as well, like an illness
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  or a passing that bring about these difficult conversations
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  and even big professional milestones
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  like a liquidity event for a business.
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  So we really see those are the types
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  of triggers for these types of conversations.
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  Unsurprisingly, parents and senior wealth owners
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  are the ones to initiate these conversations.
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  But really, most next gen ones, we're in the dialog.
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  Wish that we had had these conversations.
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  Much as you're sure, we see a lot of these conversations
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  happening for people in young adulthood,
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  but we help families with children as young as three.
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  Have these conversations.
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  And for those that might be thinking, well,
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  you know, talking about this too early creates a, you know,
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  sense of responsibility or
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  is even worrying about, you know, sharing details
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  about money might create a sense of entitlement among children.
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  Sure.
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  But we find that starting earlier actually creates
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  the opposite effect.
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  It creates a lot of empowerment and clarity.
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  And by the way, there's also ways to have these dialogs
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  and conversations
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  without revealing the entire balance sheet at once.
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  So we actually in almost every client engagement that my team,
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  works on, we start with a conversation around purpose,
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  values, and intent around wealth, really starting with Y.
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  Because when the family and especially that next
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  generation has a sense of why,
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  you know,
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  the wealth was created and what is important to the family,
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  that will really serve
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  as the guidepost in the marker
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  as you get into more difficult conversations with regard
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  to structure and governance, that can happen later on.
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  So we started with purpose and values.
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  Yeah. You know, it's a really good point that you bring up.
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  I've sat in my chair, hosting, you know, conversations like these
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  for a long time now.
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  And many conversations have related to the idea
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  of having difficult conversations, whether it's about finances,
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  preparing for, you know, the illness or death of a loved one.
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  Like,
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  these are conversations
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  that are not the most easy thing
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  to just kind of bring up on a Sunday
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  when you're sitting with your parents
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  or your grandparents saying,
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  hey, have you thought about what happens
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  when you know you're no longer on this earth?
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  It's not the most comfortable thing,
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  but there are ways to have those conversations.
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  Even working with a financial advisor who can maybe sort of help
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  guide that conversation a little bit.
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  So, you know, I think there's a lot that's in the report.
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  I would encourage
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  everybody watching today
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  to reach out to a financial advisor at UBS,
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  get a copy of the report.
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  There's some great information in there and more,
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  feedback from the surveys and results.
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  But I just wanted to ask you, like,
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  talk about the consequences of this.
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  Talk about what families who are watching this today,
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  what they should be thinking about to take that journey
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  if they're not already on it, how do they start it?
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  And what what are the consequences if they don't? Right.
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  And you know, we often find that
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  if these conversations haven't happened, it's
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  not because people don't care.
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  They don't find it important or haven't found.
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  Find time to plan.
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  Like you said on a Sunday,
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  no one's just bringing this up out of the blue.
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  That's actually one thing that we really advocate for in our work
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  is creating intentional time for these conversations.
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  We recommend, and we actually can help facilitate in a lot of,
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  in a lot of cases,
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  family meetings that are separate from dinners or holidays.
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  Sometimes they can take place on a family vacation if that's when
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  everyone is together.
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  But really setting aside 2 or 3 hours with a set
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  agenda, topics
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  that need to be discussed and not just going through that agenda,
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  but then committing to that as a long term conversation.
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  So I would just like to reiterate
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  to everyone that creating intentional time is really important.
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  I don't think anyone expects you to bring this up at, you know,
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  the next right Christmas or how Mother's Day
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  is going to be the ham
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  and the turkey around the table and the mashed potatoes.
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  And by the way, let's talk about this
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  difficult conversation about money.
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  Yes, yes, exactly.
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  Which is never an easy topic to bring up in the first place.
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  Exactly right.
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  And maybe it happens over multiple conversations
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  and maybe it's not just the one and done right.
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  And in other places where people get stuck sometimes
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  include clarity around roles and responsibilities.
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  So we've talked about people
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  feel that shift and responsibility
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  before they even come into money.
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  Maybe you have some next generation family members
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  already involved in the family business,
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  working there in some capacity.
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  Maybe you have family members who are kind of informally
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  managing families investments or are involved in some other way,
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  but what structure can help introduce is creating,
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  you know, putting that conversation on paper
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  and allowing the family to ask, okay, who is involved?
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  And also sometimes who isn't involved.
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  And that can create, you know, uncomfortableness.
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  But again, in the longer term, that structure
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  really helps guide the path going forward.
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  And once something's on paper,
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  you know, it can always change too.
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  But it's about what does our situation look like now?
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  Another place or a consequence,
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  as you mentioned, that people get stuck.
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  Is, doing this too late or all at once?
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  Many people do wait until that defining life moment,
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  and at that point, it can feel
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  a little bit more reactive than proactive.
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  Deciding under pressure, making difficult decisions.
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  Exactly. We all want to avoid that.
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  If you're already stressed out about whatever
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  that particular event is,
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  it doesn't make this particular conversation any easier.
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  Exactly, exactly.
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  So starting earlier, communicating clearly is always important.
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  And we advocate for that. Right.
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  So the families who are doing this well
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  and that 33% maybe who are already on their way,
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  they don't view structure or these conversations as constraints.
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  They're flexible and willing to evolve
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  and see it as an empowering, source as they continue.
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  Excellent. Libby. Thank you. Great stuff.
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  Congratulations to you and the team on the report, the survey
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  that's in there.
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  So I would encourage everybody
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  to make sure they get a copy of that. Good to see you, Libby.
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  Good to see you too, Anthony. Thank you.
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  You too. Libby Stantial.
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  Everybody, thank you very much for joining us as well.
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  If you'd like more information,
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  you can visit our website at ubs.com/views.
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  lots of content there for you.
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  And make sure to follow us on social media.
• 12:44
  We're on LinkedIn and Facebook.
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  Plus, UBS Studios has its own Instagram channel at UBS trending
• 12:50
  is the name of that. So give us a follow there.
• 12:51
  And as always,
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  if you do have any questions or want to get a copy
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  of the next gen report that has the survey results in it,
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  make sure that you are continuing this conversation
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  with your financial advisor.
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  And until next time, I'm Anthony Pastore.
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  We wish you a great rest of your day
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  and remember to keep your eyes on what's trending.
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  See you soon everybody. Thanks.