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Bloomberg
8 hours ago
- Business
- Bloomberg
How Do You Pick the Best Wealth Manager?
By and Merryn Somerset Webb Save Subscribe to Merryn Talks Money on Apple Podcasts Subscribe to Merryn Talks Money on Spotify The more than $100 trillion wealth transfer that's projected to be passed down from older to younger generations over the next quarter century is set to reshape the wealth management industry. And younger investors plan to move their money to new advisors, according to a report by IT services and consulting group Capgemini.
Yahoo
3 days ago
- Business
- Yahoo
'Peak 65': How 4.2 million Americans turning 65 will reshape money conversations
Listen and subscribe to Decoding Retirement on Apple Podcasts, Spotify, or wherever you find your favorite podcasts. The US is entering a historic demographic shift: In 2025, a record 4.2 million Americans are forecast to turn 65, the largest number in a single year. This milestone, dubbed "peak 65," is a 'huge demographic moment,' Fiona Greig, global head of investor research and policy at Vanguard's Investment Strategy Group, said on the Decoding Retirement podcast (see video above or listen below). 'Not until 2050 will so many people again be turning 65,' she said. 'This is the largest bulge in our aging population that we've ever experienced.' Read more: What is the retirement age for Social Security, 401(k), and IRA withdrawals? This embedded content is not available in your region. It's also a massive financial moment. The baby boomer generation has accumulated an estimated $82 trillion in wealth. Some of that will be spent in retirement — on travel, healthcare, or long-term care — but a substantial portion will also be transferred to the next generation, either as a planned inheritance or when older adults outlive their resources. This massive shift of wealth raises an important question: Who's next in line? In many cases, it's a spouse — often a woman. 'Married women have about a 70% chance of outliving their husbands,' Greig said. 'And if they do, they can expect to live for another 10 years.' It also means families must talk openly — and early on — about money, discussing what kinds of assets they have, where they are held, and what their goals are. 'These are not just estate planning questions,' Greig said. 'They're essential financial conversations that can help families manage both assets and expectations.' These discussions may be uncomfortable, as discussing money — especially across generations — has long been considered taboo. Read more: Retirement planning: A step-by-step guide But that's starting to change. Today, more families are facing these questions earlier, often due to student debt, college funding, or early participation in 401(k) plans. Trading apps and financial platforms are also pushing younger generations to talk about investing. That exposure is shifting attitudes, which is reason for optimism. 'I'm hopeful that families can have a more honest conversation through the years — not just when it matters most in retirement,' she said. For older adults, the desire not to be a burden on their children is common — but good intentions don't replace planning. Waiting too long to talk about finances can lead to confusion or a crisis, especially as people age. 'With these longer lifespans, about two-thirds of 70-year-olds can experience some form of cognitive decline,' Greig said. 'I'm not saying full-on dementia, but we start to lose our acuity.' The result? Greater vulnerability to scams, mistakes, or poor decisions. 'If there's a simple reason to have this conversation with the next in line, it's to protect the assets that the family has worked so hard to accumulate,' she said. Each Tuesday, retirement expert and financial educator Robert Powell gives you the tools to plan for your future on Decoding Retirement. You can find more episodes on our video hub or watch on your preferred streaming service. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Telegraph
5 days ago
- Business
- Telegraph
Octopus targets baby boomer inheritances with cheap will-writing
The multibillion-pound fund behind Octopus Energy is rapidly expanding its will-writing business amid a wave of wealthy baby boomers preparing to pass on fortunes to their children. Octopus Legacy said it was fielding 'a massive interest in estate planning', as baby boomers begin to draw up wills to transfer their assets to younger generations. Over the next 30 years, trillions of pounds is expected to be transferred to millennials and Gen Z-ers in what is expected to be the largest wealth transfer ever recorded. Sam Grice, the chief executive of Octopus Legacy, said: 'I think £5.5 trillion is going to be passing from one generation to the next.' Research has suggested that those born between 1946 and 1964 are the richest generation in history, while figures from the Office for National Statistics show that households with people aged between 65 and 74 are 33 times wealthier than Gen Z-ers, with nest eggs worth £502,500 to be passed on. Mr Grice said there was a growing interest in estate planning and will-writing as baby boomers became more aware of their own mortality and were looking for cheaper options to deal with their fortunes. The cost of a simple will is typically between £150 and £200, while solicitors often ask for more than £500 for specialist wills. Octopus charges £100 for its online wills or £150 for will-writing with a phone call or home visit. Mr Grice said many people getting in touch were also raising questions over the impact of recent Treasury changes. In her October Budget, Rachel Reeves, the Chancellor, altered both business property relief (BPR) and agricultural property relief (APR). Under the changes, inherited farms worth more than £1m will be taxed at a rate of 20pc, having been shielded from the levies for decades, while a 20pc rate will also be charged on inherited business assets over £1m when someone dies. Mr Grice said: 'When we have our consultations with clients, most of them have a question about inheritance tax.' The rapid expansion of the estate planning arm comes three years after Octopus Group bought the will business, then known as Guardian Angel. It was later rebranded as Octopus Legacy and is now the second-largest estate planning firm in the UK. The business reported a turnover of £245,280 from Jan 1 2022 to April 30 2023. It made a pre-tax loss of £1.22m during the same 16-month period. This week, it bought WSL Will Writing. Mr Grice said Octopus Legacy was looking to mirror the success of the group's energy business Octopus Energy. 'We want to become the market leader in these services and be a really dominant brand ... Once you become a market leader, you have true ability to reshape an industry.' 'For us, that's things like driving fair pricing, being really transparent, focusing on the customer and also having a wider conversation about how you want to be remembered.' Octopus Group was founded in 2000 by Simon Rogerson, Christopher Hulatt and Guy Myles after the trio quit their jobs in asset management in their early 20s. The company is best known for launching Octopus Energy, which has grown from nothing in 2015 to serve almost 13m customers today. The provider has since been spun out of the group but Octopus Group remains the largest external shareholder. Meanwhile, Octopus Group has expanded into a number of different sectors through its investment arm, which manages funds of roughly £10bn for more than 63,000 investors. Earlier this year, Octopus also announced it was launching a new mobile network.
Forbes
7 days ago
- Business
- Forbes
Building Generational Wealth: How To Ensure Your Assets Last
Man taking photo of happy multi-generation family with smartphone. The United States is in the midst of one of the largest wealth transfers in history. With the Great Wealth Transfer underway, the latest figures from Cerulli (as of December 2024) show that $124 trillion will transfer through 2048, with $105 trillion going to heirs. Estate planning is no longer just for the wealthy—it's something everyone with assets should consider. According to Jen Galvagna, Head of Trust, Estates and Tax at Bank of America Private Bank, and John Nebeker, a financial advisor and author of The Family Bank: The Key to Generational Wealth, having a clear plan in place is crucial for anyone looking to pass on wealth thoughtfully. "When I start a class, I always ask, 'What happens to your assets if you die without a will or estate plan?' Almost always, someone answers, 'The state takes your property,'" Galvagna says. "But that's not true. The state simply decides where your assets go, and it may not be where you want them." Without a proper estate plan, your assets will be distributed according to your state's intestacy laws, which may not reflect your wishes. Galvagna points to the case of musical legend Prince, who died without a will and left his estate tangled in a years-long legal battle. "When you don't plan, others will decide where your assets go," she notes. "In Prince's case, his music and legacy were at risk, and ultimately, the distribution wasn't what he likely would have wanted." Failing to create an estate plan can lead to pitfalls in asset distribution, guardianship, and financial decision-making. For parents, one of the most important decisions is ensuring that their children, especially minors, are taken care of. Galvagna suggests that an estate plan should include asset distribution, designate a guardian for your children, and provide instructions in case you become incapacitated. "If you have minor children, you need to decide who will care for them if something happens to you," Galvagna says. "And just as important, you need a strategy in place for what happens if you're unable to make financial decisions for yourself." As the population ages, the need for estate planning has never been more urgent. Without a plan, the risks only increase as people age. One of the biggest misconceptions about estate planning is that it's only for the ultra-wealthy. Galvagna debunks this myth, saying that anyone with assets, no matter how small, should have a plan. "It's a common myth that trusts are only for the ultra-high-net-worth," she says. "Anyone with assets should have a say in how those assets are distributed. Trusts provide a way to control that distribution over time. It's not just about money—it's about your legacy." In fact, trusts allow individuals to set up long-term strategies for distributing their assets. A trust ensures that beneficiaries are taken care of for generations instead of handing them a lump sum that could quickly be spent. One strategy for preserving wealth across generations is the "Family Bank" concept, popularized by financial advisor John Nebeker. In his book The Family Bank: The Key to Generational Wealth, Nebeker explains how some of America's wealthiest families, including the Rockefellers, have used this model to sustain and grow their wealth. 'The Family Bank is about creating opportunity, not entitlement,' Nebeker says. 'Families replace gifts with loans, and entitlements with opportunities.' Instead of leaving a lump sum inheritance, a Family Bank provides structured loans to heirs for significant life milestones—like education, buying a home, or starting a business. This approach encourages responsibility, and allows families to retain control over the assets, ensuring wealth is used wisely and not squandered. For families looking to build generational wealth, the Family Bank offers a structured way to ensure assets are used responsibly, preserving long-term financial success. Family conflict is one of the biggest challenges in estate planning. Galvagna recommends open and transparent conversations with family members to avoid surprises and misunderstandings after your passing. "There's nothing worse than family fighting over who gets what," she says. "Be upfront with your kids and even involve them in the decision-making process. For instance, if you have tangible property, like a family heirloom, ask your children what they'd like to inherit." She shares an example of a family with four children and valuable heirlooms. By having each child choose their top three items, the parents were able to distribute the property fairly without any conflict. Parents with wealth often worry that their children will squander their inheritance. Galvagna explains that trusts can set restrictions on how and when beneficiaries can access funds, preventing misuse or financial irresponsibility. "Trusts are a powerful tool to protect assets," she says. "If you leave an inheritance outright, it becomes subject to divorce settlements or creditors. But with a trust, you can control how and when the assets are distributed, even for health, education, and maintenance." For parents concerned about their children's ability to manage large sums of money, Galvagna suggests creating specific conditions for accessing trust funds. For example, a child may only be able to use their inheritance for buying a home or starting a business rather than for frivolous spending. While many people think estate planning is only for the elderly or the ultra-rich, Galvagna argues that it's something everyone should do—especially if they have children or significant assets. Whether it's a 401(k), a house, or savings, planning ahead ensures your wishes are honored and your legacy is preserved. "Estate planning isn't about death—it's about ensuring your family is protected, no matter what happens," she says. "Whether you're in your 40s or 70s, it's never too early to start." By taking the right steps and working with a professional advisor, you can create a plan that ensures your wealth is passed on as intended—without unnecessary legal battles or family disputes.
Khaleej Times
29-05-2025
- Business
- Khaleej Times
A paradigm shift in wealth management of the next generation in the Middle East
The Middle East is experiencing an unprecedented generational wealth transfer as family-owned businesses, investments, and fortunes transition to younger, tech-savvy heirs. This shift presents significant opportunities and challenges for wealth management professionals. At a global level, this 'Great Wealth Transfer' is projected to shift $18.3 trillion of collective wealth to younger generations by 2030. As traditional values intertwine with modern financial strategies, next-generation wealth holders demand a fresh approach to portfolio construction, planning, and governance. More specifically, the Gulf Cooperation Council (GCC) region is home to some of the world's wealthiest families. Nearly 70 per cent of private wealth is tied to family businesses and about $1 trillion in assets expected to pass to the next generation by 2030, the scale of the wealth transfer is extraordinary. This transfer is not merely about financial assets; it is also about legacy and responsibility. Heirs are increasingly aware of the need to adapt to a globalised economy, navigate geopolitical challenges, and prioritise sustainability. These factors necessitate a shift in how wealth is preserved and grown. The new generation of wealth holders in the Middle East is often more educated, globally connected, and digitally adept than their predecessors. They seek a departure from traditional investment approaches, emphasising innovation, diversification, and purpose-driven strategies. Wealth management firms must align with these evolving preferences to remain relevant. Governance and succession planning While family businesses represent the backbone of private wealth in the Middle East some still lack formal governance structures. Without proper planning, succession disputes can erode wealth and damage relationships. To address this, families are increasingly turning to family charters – outlining roles, responsibilities, and decision-making processes for heirs and independent advisors – leveraging the advice of third-party experts to mediate and ensure a smooth transition. Fostering open communication and educating heirs about financial stewardship is equally critical. Portfolio diversification and innovation Historically, Middle Eastern portfolios heavily relied on regional real estate, oil and gas ventures, and equities. While these asset classes remain significant, next-generation investors are diversifying into other asset classes. Over the last few years we have seen an increased focus towards thematic investments such as global equities, crypto, technology startups, green energy projects, and alternative assets such as private equity and hedge funds. This diversification reflects a more sophisticated risk-return strategy, as these younger investors aim to balance traditional wealth preservation with growth opportunities. Beyond the financial benefits, they are also contributing to creating a positive social impact. Personalisation and digital integration Next-generation clients are seeking more personalised services and seamless digital experiences that allow them to engage with their finances on the terms that best suit their needs - tech-driven solutions can provide this. Wealth managers have started to adopt cutting-edge fintech solutions for portfolio monitoring, reporting, and advisory. Artificial intelligence and big data analytics can help tailor strategies to individual preferences and market trends, enhancing client satisfaction and engagement. However, these changes have also created a certain number of shifts in the engagements between wealth manager and client. Recognising that understanding a client's investment goals and values are crucial to delivering personalised advice, wealth managers' interactions, which were once purely transactional, are becoming more grounded in relationship-building. Philanthropy and legacy building The Middle East is increasingly active in philanthropy. The UAE ranked ninth place in the CAF World Giving Index 2024; and annual giving across the GCC surpassed $200 billion in 2022. Reflecting a global trend, younger philanthropists in the region, particularly millennials and Gen Z, are shifting away from traditional charity to embrace strategic, meaningful hands-on approaches aimed at systemic change. A report titled 'Grounded in Tradition, Looking to the Future: Understanding Next-Generation Philanthropy in the Middle East' published by the Pearl Initiative, a non-profit organisation, revealed that over 45 per cent of respondents said they were looking to embrace non-tradition philanthropic models including impact investing, micro lending and donor advised funds. This correlates with the younger generation increasingly looking at solutions that address the root causes of many issues and, in doing so, taking more of a holistic approach to philanthropy. Conclusion The next-generation wealth transfer in the Middle East is more than a financial transition; it is a shift in mindset and priorities. As the younger heirs redefine the region's approach to wealth, emphasising global diversification, sustainability, and technological innovation, striking a balance between respecting cultural traditions and innovating remains crucial. Wealth management professionals must recognise these dual motivations and support the next generation in their quest to navigate them effectively. This is precisely where the strengths of private banks in the region lie — blending centuries-old traditions with modernity and agility to deliver a seamless and exceptional customer experience. By addressing the unique needs of this emerging class of investors, financial institutions can secure their role as indispensable allies in shaping a resilient and impactful future for Middle Eastern wealth.
