Wealthy Migrant Families Focus Too Much On Current Tasks, Ignore Future Strategy – ANZ Private Bank

This news service has interviewed the private banking arm of ANZ for an Australia and New Zealand angle on attitudes towards family wealth, governance, transfer, strategy, and more.

ANZ Private Bank, part of Australia and New Zealand Banking
Group, or ANZ, said
its research has shown that the next generation of wealth
inheritors coming to Australia from overseas is more inclined to
follow their own path. Nearly a third of 18 to 35-year-olds
inheriting family wealth are determined to use their inheritance
to “do their own thing,” moving away from their
predecessors’ traditional approaches. In one finding, the study
showed that 21 per cent of families don’t hold family meetings –
ever. 

 

This news service interviewed Ofer Greenberg, ANZ’s head of the
private office business, about its work in this area. 

Ofer Greenberg

WealthBriefingAsia: ANZ research shows that only
three in 10 family offices are ready for inheritance and have
plans in place for transfer. Given how often the importance of
wealth transfer is stressed, why is the lesson not getting
through? What’s the issue?

Greenberg: Often high net wealth individuals are
too strongly focused on the present to give the future the full
attention it deserves. 

With so many questions to consider on how to pass on wealth, it
can be a daunting decision to begin approaching conversations
about wealth transfer. It’s easy to put this process off as the
decisions become overwhelming without a clear roadmap for the
family’s future. 

One of the most common concerns we hear among our clients is how
this future planning, and conversations around the next
generation’s inheritance, will impact family unity – but avoiding
these conversations only delays, and often worsens, the risk of
related family conflict. ANZ Private recently released our
Next Generation Wealth Transfer Report (1), which found
that 21 per cent of private bank clients never hold family
meetings. From our experience, and the experiences of our
clients, starting a frank, open and early dialogue between
generations can help smooth the transition and prevent friction
between family members.

WBA: What approaches does ANZ have to try to
engage families, including younger adults, to have conversations
about business/wealth and getting people prepared? Any specific
examples from real life that you can provide (can be an anonymous
client case)?

Greenberg: ANZ Private approaches wealth transfer
planning as an opportunity to begin the conversation between high
net wealth Australians and their families. As our clients’
trusted advisors, our goal is to provide a solid foundation on
which they can build a strategy tailored to the individual needs
of their family. 

ANZ Private brings a unique perspective, working with business
owners, family offices and private clients to understand their
individual needs. Our research found that 29 per cent of family
members aged 18 to 35 want to make their own path, which reflects
our understanding that each situation is different and needs a
tailored approach to support the next generation. 

Each generation involved in the wealth transfer process has
something at stake, so it’s important to come to the discussion
with an open mind and encourage a two-way conversation. The
younger generation might not share the same priorities as their
older family members. Getting on the same page with how the
inheritance can help to protect and build a legacy that
all parties are proud of will significantly reduce the risk of
family conflict and reduce the burden of wealth management that
many young family members experience. 

WBA: What sort of help do you see
families/younger adults/others asking ANZ for most? Have you
noticed specific themes emerge?  

Greenberg: While clients have a wide range of
motivations for seeking professional support, some of the common
reasons that Australians engage with ANZ Private include a desire
to protect their legacy, to minimise family conflict during
wealth transfer, or to manage their estate through changing
circumstances.

No matter what stage of the planning process they’re in, most
clients seeking out a private wealth advisor are looking for
guidance on how best to prepare the next generation to best
manage their inheritance. 

Among the high net worth families that we work with at ANZ
Private, we are seeing key generational trends emerge. Older
clients, who are typically in the process of planning their
wealth transfer, are often most concerned with ensuring that the
next generation is prepared to inherit the responsibilities
associated with controlling the family’s wealth. For these
clients, family unity is a top priority, so their wealth advisor
must distribute their wealth accordingly. 

Younger family members are often in the process of setting up
their life, so common services ANZ Private often supports with
include:

— Our expertise in complex home lending; 

— Commercial property financing; 

— Luxury asset financing; and 

— Share-backed loans. 

We regularly see younger clients seeking advice on their next
steps, as they juggle their financial goals with pressures to
carry on their family legacy. 

WBA: Do you see a lot of bewilderment/confusion
among families over the range of trusts and other structures
that can be used for wealth and estate planning/structuring? How
can this be improved?

Greenberg: Faced with a range of structures that
families can adopt to support their wealth, it can be confronting
and confusing to decide what might be best for you. Having the
right advisors to help navigate through this complexity is
critical. The best way families can understand what structure is
best for their unique situation is to speak with an ANZ Private
wealth advisor. We recognise the unique needs of high net worth
clients, enabling us to create bespoke solutions using our
differentiated policies to meet their specific requirements and
objectives.

Growing a strong relationship with your ANZ Private advisor is
the best way to ensure that your wealth structure is tailored and
adjusted to your current and future needs. Our focus on a
client’s needs, in-house investment capabilities and ability to
support financing complex lending requests can help to simplify
financial management and ensure clients have a simple structure.

WBA: An important task for a wealth management
consultant is helping to set clients’ expectations about what is
realistic in their plans. How big a part does “coaching” the
client play at ANZ? Does this mean that you have recruit certain
types of advisors? Are you having to recruit and bring in more
women, for example, to deal with female wealth holders and
entrepreneurs?

Greenberg: ANZ Private advisors are experts in wealth
management, experienced in supporting families through the
process of passing down their assets to ensure their continuing
legacy. Our advisors recognise the unique needs of our high net
worth clients and tailor their advice accordingly.

The demographic of Australia’s high net worth individuals is
changing. We’re seeing more females holding and passing down
wealth, as well as a broader cultural mix than we”ve seen
previously, which is reflected in ANZ Private’s diverse team of
advisors. Our team has a broad mix of backgrounds, so they’re
able to understand different cultural norms and aspirations to
relate to our clients’ diverse needs.  

Broaching conversations on wealth transfer demands
significant sensitivity from all involved, requiring ANZ Private
advisors to build trusting relationships and navigate emotional
situations with their clients. 

WBA: About ANZ Wealth Management team: What does
the private office of ANZ do? What are its business areas? Within
what part of ANZ does the private office sit? Does the private
office have a rough ratio for how many clients each of its staff
should look after?

Greenberg: The ANZ Private team works with many of
Australia’s ultra-high net worth families and helps to plan,
manage, preserve and grow their wealth. As part of the broader
ANZ Banking Group, ANZ Private provides clients with a
personalised relationship and access to a range of solutions,
tailored to their specific needs.

Services span investment and strategic advice, transaction
banking and complex structured lending across multiple asset
classes. ANZ Private clients may benefit from the insight of the
15-person chief investment office that manage in excess of A$9
billion ($5.95 billion) in funds under advice.

Footnotes

1,  The Private Wealth Network 2022 Membership Survey,
sponsored by ANZ Private