The Super Rich Think Their Kids Will Blow Their Fortunes; What It Could Mean For Luxury Marketers

Knight Frank is out with their 2017 Wealth Report, and it like others projects significant growth both in the Ultra High Net Worth (UHNW) population and their cumulative wealth.

 

While the past 30 years have seen record levels of wealth creation within the upper echelons of the one percent and an epic number of new and highly valuable companies launched, the Super Rich have concerns about the transfer of wealth to their children, and believe it or not, inheritance taxes were not number one.

 

The survey asked, What are your clients’ biggest concerns regarding how they will pass their wealth to the next generation?

 

The top answer globally with 62% was “Next generation will squander or mismanage their inheritance.” This concern was highest in Australia (84%) and North America (83%) and lowest in Latin America (33%).

 

Dividing wealth equitably between children (52%) is also a key issue, particularly with multiple marriages and groupings of offspring, while 46% say the next generation should earn its own money.

 

Groups like #RichKidsofInstagram make good newspaper articles and generate a lot of clicks for those that earn money generating clicks, however, if true, the Knight-Frank research should cause some consternation with luxury marketers.

 

If UHNW adult children are looking to their parents on when it’s OK to spend on luxury, and perhaps are over-conscious about their luxury spending habits, not wanting to create a poor impression with mom and dad and perhaps risking their significant inheritances, it brings an interesting new dynamic to the Super Rich household.

 

I see it in two parts: UHNW children will perhaps spend less than normal until the wealth transfer, but post-transfer, there is a potential for a surge. From a shorter point of view, it also may mean marketing to both generations at the same time as an interesting strategy and a strong reminder the spending ethos of Super Rich families often starts at the top.

 

Screen Shot 2017-03-13 at 8.01.26 AM

Source:  Knight Frank

About Doug Gollan

I am Editor-in-Chief of Private Jet Card Comparisons and DG Amazing Experiences, and a Contributor to Forbes.com.
This entry was posted in Divorce, douggollan, luxury, Marketing, Media, superrich and tagged , , , , , , , , , . Bookmark the permalink.

One Response to The Super Rich Think Their Kids Will Blow Their Fortunes; What It Could Mean For Luxury Marketers

  1. abbyofayala says:

    This article is great! Thats why many wealthy people afraid to loose their wealth

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s