Why the Next Generation of Leaders are So Important
Below is an excerpt from my article, Understanding the Voice of the Rising Gen, from the 2019 FOX ForesightTM publication.
As wealth owners shift gears to succession planning, there is an entirely new set of issues to tackle. Preparing the Rising Generation for leadership is never easy. While each family is unique, certain transition themes remain consistent. Ever-present is the challenge to continue engaging those in the rising generation who have left home and built their own lives. Even once they are engaged, current family leaders often feel uneasy about letting go— unsure whether their children are properly educated, experienced, and capable of carrying on the family legacy. The challenges begin to compound as the family tree expands—sibling and cousin groups are often fragmented in their involvement and approach.
Family Office Exchange (FOX) is committed to preparing the next generation of family leaders. To reinforce that commitment, in 2018, we launched a Rising Gen Network (RGN) within our membership.
RGN is a community of family members in their 20s, 30s, and early 40s who aspire to be leaders within their family enterprises. It is a confidential space to connect with peers, share experiences, engage in learning, and develop skills as future family leaders.
Below are findings from our research and direct feedback from our members to highlight the importance of building the next generation of future leaders.
Why the Next Generation of Leaders are So Important
Many families have experienced a generational transition of leadership at least once before. Those currently at the head of the table were once the “rising gen” themselves, trying to navigate the complexities of wealth, family dynamics, and the family enterprise.
While never seamless, the last transition of leadership and wealth garnered much less attention. So why the tremendous emphasis on this rising generation?
- They Will Control the Population
The Rising Gen are the largest adult generation in the United States.1 - They Will Control the Wealth
70% of family offices around the globe expect to transition wealth to the next generation within the next 10-15 years.2 We must not forget about the other 2/3 of Ultra-high-net worth (UHNW) millennials who are self-made and have created nearly half-a-trillion dollars of new wealth in the last decade. They are already in control of their wealth at a young age. - The Asset Levels are Significant
$4 trillion of UHNW capital is expected to transfer within a decade.3 They will inherit the rest of the $30 trillion transfer within 30 years.4 This accounts for nearly 75% of the total aggregate wealth controlled by UHNW families. - They Have the Ability (and Desire) to Deploy Capital Globally and Instantly
This generation is ready to take action and not afraid to spend in order to do so.
The difference between this rising generation of leaders and those that came before is not the “what” (they are pursuing the same values). Instead, it is the “how.” It is how they go about pursuing the values and stewarding the family’s legacy and their own. Their methods are different in that they are:
The scope of interests and physical geographic footprint of this generation is much wider than ever before.
It is no secret that the primary (and sometimes only) form of communication for this generation is digital. It is also instant and constant.
Given the previously mentioned digital advancements, information is available (and demanded) in real-time. This encourages the more immediate implementation of ideas.
An ironic complement to the virtual world in which this generation thrives is one where physical and emotional connections are so important.
Members of the rising generation are heavily influenced by their peers. This group has a strong desire to learn from one another and leverage diverse strengths and experiences to tackle issues together.
We have recently seen a tidal wave of innovative solutions to complex issues that have been around for centuries. This generation, driven by purpose and curiosity, is seeking to solve the world’s problems through economic avenues.
Closing Thoughts
Bridging the gap between generations has become the most pressing issue for many of our families. Parents want to raise happy, healthy, and prepared children; children want to be included and heard while finding their own way. Family office staff and advisors want to support these endeavors to ensure effective stewardship of wealth continues.
While there are many challenges associated with creating generational fluidity and a seamless wealth transition, we are optimistic and excited about the opportunity that exists with this next generation of leaders.
The FOX Rising Gen Forum on May 5-6 in Dallas offers next generation family members a place to connect and build community with like-minded peers looking to engage in learning, shared experiences, and to develop skills as future family leaders. Click below to learn more:
To learn more about how FOX is preparing the next generation of family leaders, contact Paulina Cromwell at pcromwell@familyoffice.com.
1Fry, Richard. “Millennials projected to overtake Baby Boomers as America’s largest generation.” Pew Research Center. https://www.pewresearch.org/fact-tank/2018/03/01/millennials-overtake-baby-boomers/ (March 1, 2018).
2UBS. “Global Family Office Report 2016.” UBS.com. https://www.ubs.com/global/en/wealth-management/uhnw/global-family-office/global-family-office-report-2016.html (2016).
3Wealth-X. “Preparing for Tomorrow: A Report on Family Wealth Transfer.” Wealth-X.com. https://www.wealthx.com/report/preparing-for-tomorrow-a-report-on-family-wealth-transfers/ (September 12, 2016).
4Same as previous (Wealth X)