According to The Rise of Generational Wealth: 2024 Quintet/BlackRock European Wealth Insights, a poll of high-net-worth individuals (HNWIs) in Belgium, Germany, the Netherlands, and the UK, HNWIs in Europe are generally optimistic about the future, but many have not yet begun making plans for it.
One-third of those polled who have not yet retired have not begun to plan financially for their golden years. Furthermore, half of those who have begun building a retirement plan report that they do not currently have a complete plan in place. Among such participants, multigenerational HNWIs, or those with significant inherited wealth, are significantly more likely than first-generation HNWIs to have begun planning for retirement.
In a similar vein, while 80% of active European HNWIs indicate they wish to pass on their fortune to their offspring, only 34% have a detailed plan in place to do so. This includes 39% of German respondents, 35% in the United Kingdom, 33% in Belgium, and 29% in the Netherlands.
The age at which survey participants’ children or heirs should begin discussing their money was another question posed to them. The average respondent stated that the ideal age to initiate such talk is 24. In contrast, the average desired age among responders in the UK is 22.
For all poll respondents with children/heirs, such chats occurred on average when their children were 21 years old. Multigenerational HNWIs are more likely to declare their wealth when their children/heirs are younger than their first-generation counterparts.
Investment tactics
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By GlobalDataWhen it comes to investing methods, over half of European HNWIs looking to increase their wealth in the next five years have already invested in equities and/or real estate to help them achieve their financial objectives. By contrast, survey respondents who are concerned with protecting their wealth are significantly less likely to have such investments in their portfolios.
Specifically, 43% of individuals looking to increase their wealth are now investing in enterprises. In comparison, only 17% of individuals looking to preserve their wealth are now investing in enterprises. Growth investors invest in a variety of items to achieve their financial objectives, such as alternative investments (30%), currencies (25%), and/or commodities (24%).
Faith in the future
Multigenerational HNWIs are far more inclined than their first-generation counterparts to anticipate a rise in personal wealth over the next five years. Notably, female poll respondents are nearly twice as likely as male respondents to predict their wealth will decline in the next five years.
The primary explanations for optimism among poll respondents who expect their personal wealth to improve over the next five years are the anticipated favourable performance of their investment portfolios and the capacity to effectively oversee their wealth. UK HNWIs have far more confidence in those areas than their counterparts in Belgium, Germany, and the Netherlands. It is also proportionally greater among male survey respondents than female responders.
The research additionally shows several cultural disparities among European high-net-worth individuals. Among all those polled, HNWIs in the UK are significantly more likely than their Continental peers to concur that their own hard work and commitment have contributed to their success. UK HNWIs is likewise significantly less likely to believe that their wealth is at least somewhat due to luck.
Quintet & BlackRock viewpoint
Chris Allen, Quintet Group CEO stated: “Together with BlackRock, we are delighted to share these insights into the hopes, concerns, and aspirations of European high net wealth individuals. Amidst the greatest transfer of private wealth in history, we believe that understanding generational drivers and differences is more crucial than ever for organisations that help individuals and families to protect, grow and pass down wealth.”
Ivan Pascual, Head of EMEA Wealth Client Business at BlackRock, added: “The survey findings reinforce the importance of having comprehensive financial plans in place as well as a well-structured investment portfolio to grow and preserve wealth. For many this includes a sizeable allocation to alternative investments given the valuable role they can play in enhancing returns and providing access to unique opportunities.”
